L&T close to picking equity in Australian, Indonesian coal mines
Chennai, Aug. 19 Larsen & Toubro Ltd is close to buying equity stake in coal mines in Australia and Indonesia.
"We are in the process of completing the due diligence," said Mr K. Venkataramanan, Member of the Board and President Engineering & Construction.
He, however, declined to provide details of the location of the coal mines or the stake that L&T will pick up in the mines. "We will make the announcement in two to three months," he told Business Line. The company has set up a group to scout for coal mines abroad.
Picking up a stake in coal mines is part of L&T's strategy to increase its focus on the power sector. Apart from tying up with Mitsubishi Heavy Industries for manufacturing super-critical boilers, turbines and generators, L&T also plans to set up power plants on its own, including bidding for ultra-mega power projects, or pick up equity stake in projects being set up by others.
In the next couple of years, L&T hopes to have 4,000-6,000 MW of power plants under development and the equity in coal mines abroad will be to feed these power plants, according to Mr Venkataramanan.
It has set up two subsidiaries L&T Power Projects Ltd, which will invest in power projects, and L&T Power Development Ltd, which will set up power plants.Ultra mega projects
According to Mr Venkataramanan, L&T will bid for ultra-mega power projects and is also talking to other companies that are putting up power projects for a possible equity stake. Besides, it is also talking to Tata Power, Videocon, Adani and Torrent Power for equipment supply and for project work. Except Torrent Power's project, which is an expansion of an existing gas-based power project, all others are coal-based projects. The L&T-Mitsubishi joint venture will also submit bids for nine plants of 660 MW each being put up by NTPC Ltd, the country's largest power utility.
Last year, L&T signed up with Mitsubishi Heavy Industries of Japan and formed two companies L&T-MHI Boilers Pvt Ltd and L&T-MHI Turbine Generators Pvt Ltd with L&T holding a 51 per cent stake in each, for making super-critical power plant equipment. Both these plants are coming up at Hazira in Gujarat, where L&T has a large operation.
Mr Venkataramanan said L&T's existing expanded facility at Hazira had the capacity to produce power plant equipment for 4,000 MW capacity. It was setting up an additional facility at an adjacent site for boilers, turbines and generators, which would be ready in 12-14 months.
The L&T-Mitsubishi combine recently bagged a Rs 1,557-crore order to supply super-critical steam turbine and generator for the Andhra Pradesh Power Generation Corporation's 2x800 MW plant at Krishnapatnam. This was the joint venture's first contract and the equipment would be produced at Hazira.