Coal India Ltd (CIL) has signed a pact with Malaysian power producer Mudajaya Corp Bhd’s joint venture power project in India to supply close to 1.7 million tonne of coal over 20 years.
The deal would kick-start the commissioning of first phase of the 1,440 mw plant, ending uncertainties over the project, which has suffered cost overruns due to delays in land acquisition and development of coal block.
RKM Powergen, a joint venture between Mudajaya and RK Powergen of Chennai, said it has signed the fuel supply agreement with CIL arm South Eastern Coalfields for its upcoming project in Chhattisgarh.
“We are positive about the progress made in securing coal supply. This should allay investor concerns triggered by numerous delays in the signing of coal supply since last year,” said CIMB Research to investors of Mudajaya Group, the project’s listed holding company on Bursa Malaysia.
Meanwhile, Goldman’s Sachs has added CIL to its Conviction Buy list, expecting that the company may buy shares back or pay special dividend as the government has changed stake sale plan.