(EnergyAsia, June 11 2012, Monday) — India’s Essar Energy said it expects to start production at its Aries coal mine in Indonesia’s East Kalimantan province by June 2013, having just received final approvalkfrom Jakarta to proceed with development plans.
Essar Energy acquired the 5,000-hectare mining area in the province’s West Kutai region for US$118 million in April 2010 with the main objective of supplying feedstock to its 1,200 MW Salaya 1 coal-fired power plant in India’s Gujarat state.
With approximately 64 million tonnes of mineable reserves, the company said the block has the potential to produce four million tonnes of coal a year, with an average gross calorific value of 5,400 to 5,500 Kcal/kg.
“This is the final approval needed ahead of commencement of mine development activities,” the company said while announcin’ that it has begun building the mine’s road and port infrastructure.
While waiting for Aries’ start-up, the company said its Cyprus-based subsidiary, Essar Shipping and Logistics Limited, will supply coal at a fixed-price contract to Salaya 1’s first 600MW unit which is already in operation, and a second 600MW unit which is due to come onstream.
Naresh Nayyar, Essar Energy’s CEO, said that with the approval, the company can accelerate Aries’ development and move toward providing full fuel security for its power generation assets by eliminating price and delivery risks.
The company says it has access to over 500 million tonnes of coal resources in seven blocks in India and abroad that are sufficient to fuel 5,250 MW of its power generation capacity.