The article below appeared in the Economic Times dated October 3rd 2011.

ISMT which has announced plans to enter the infrastructure sector via its integrated port and power project in Tamil Nadu is looking at acquiring a coal mine in Indonesia, as a backward linkage for its fuel requirements.

"We will need 6-7 lakh tonnes of coal per annum for both our power plants, the 40 MW captive plant at Chandrapur, in Maharashtra, and the first phase of our Tamil Nadu power plant of 170 MW. This requires a small mine of 25 million tonnes which will then protect both plants," Rajiv Goel, chief financial officer, ISMT, said.

He added that the first step, of environmental clearance for the TN power plant, is still awaited while the Indonesian coal mines will not happen just yet. By his estimate, it will be the end of FY 13 before they need to bring in investors for the integrated project. He further stated, "The Tamil Nadu power plant will be a group captive power plant, supplying power to industrial customers and not feed into the state's grid. Under the government's rules, such customers have to take a stake totalling 26%, while we are comfortable holding a 50% stake in the special purpose vehicle, Tridem Port and Port Co Pvt Ltd."

Tridem is a proposed Rs. 10,000 crore integrated port and 2000 MW thermal power plant, with the captive port ensuring coal supplies are not disrupted. While the power plant will come first, Goel did not rule out bringing in strategic investors into the port project and scaling it up to handle containers.

Energy costs for the steel maker are a significant outgo which it is trying to curb through setting up captive power plants.

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