Bloomberg News

Karnataka Power Seeks 10-Year Thermal Coal Annual Supply Deal

November 24, 2011

Nov. 24 (Bloomberg) -- Karnataka Power Corp., the Indian utility which supplies power to Bangalore, is seeking to buy 5 million metric tons of imported power plant coal annually for 10 years in its biggest ever coal tender.

The contract may be awarded in 12 to 14 months and is for deliveries starting in the year ending March 2015, G.A. Purushotham, Karnataka Power’s executive engineer for fuels, said by telephone from Bangalore yesterday. Initial offers must be submitted by Jan. 18 after which the company will shortlist suppliers and then seek final offers in the second part of the tender after a few months, he said.

Karnataka is seeking coal with 5,800 to 6,300 kilocalories a kilogram with total moisture and ash content as much as 20 percent and 14 percent respectively, and sulphur content of less than 0.8 percent, he said. It’s the company’s biggest coal tender on record, according to Purushotham.

Newcastle coal in the seven days ended Nov. 18 fell to an average $113.60 a ton from $114.85 a week earlier, according to Petersfield, England-based IHS McCloskey. India imported about 65 million tons of thermal coal for the year ended March 2011, according to government data.

Karnataka Power operates hydroelectric, thermal and wind energy plants with a total installed capacity of 5,991 megawatts and plans to add 5,200 megawatts of coal-fired capacity, according to a company document.

--Editors: Alexander Kwiatkowski, Baldave Singh

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net.


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