ntpc decides not to submit bid for bandanna en

NEW DELHI (Dow Jones)--NTPC Ltd. (532555.BY), India's largest power producer, has decided it won't bid to acquire Australian coal miner Bandanna Energy Ltd. (BND.AU), a person with direct knowledge of the matter said Friday.

"The acquisition would've been inviable for NTPC due to high coal cost," the person, who didn't wish to be named, told Dow Jones Newswires.

Earlier this month, NTPC Chairman Arup Roy Choudhury had said the power producer planned to make a final bid for a stake in Bandanna by July 29. Choudhury didn't respond to phone calls Friday.

The assets of Bandanna, which is valued at A$921.3 million, include 16 exploration permits in the Bowen and Galilee basins of coal-rich Queensland, plus licenses to explore for minerals and oil shale in the state.

According to estimates, the per-ton cost of coal for state-run NTPC from Bandanna would've been $100, the person said. "NTPC's estimate is that in the longer term coal prices will fall, which could make it a costly acquisition," the person said.

More than four-fifths of NTPC's total capacity of 34.85 gigawatt is coal-based, which makes the fuel critical for its operations. NTPC has been seeking to acquire coal assets in Australia, Indonesia, Mozambique, South Africa to secure its future fuel supplies.

Bandanna Energy couldn't be reached for comment.


- By Saurabh Chaturvedi, Dow Jones Newswire; +91-11-4356-3334; [email protected]