Reliance Power (Photo: Reuters)
Anil Ambani-promoted Reliance
Power on Thursday said one of its subsidiaries has won an arbitration award in a contractual dispute over its Indonesian coal mines. The company will receive $56 million as compensation.
Power Netherlands BV, a wholly-owned subsidiary of Reliance
Power, has won an international arbitration award of $56 Million against Prestige Capital Holdings
Ltd (a Seychelles based Company) and Kokos Jiang," R Power said in a statement.
In 2010, Reliance
Power had acquired 100 per cent economic interest in three coal mining
concessions in Indonesia.
This was acquired from Sugico Group, which is owned by Jiang. The contractual dispute is in relation to issues faced over starting operations under these mining
According to the company, these mining
concessions have total coal resources of around 1.5 billion tonnes with the potential to produce up to 30 million tonnes of coal per annum.
In the 2010-2011 period, major power producers in India saw investments in overseas coal assets as a lucrative option to secure fuel supply for their power business back home. Reliance
Power was amongst others like Tata Power, who chose to invest in coal assets in Indonesia.
However, most of these overseas investments by power companies ran into rough weather owing to fall in coal prices, change in Indonesia
coal import policy, environmental issues and other problems faced in starting operations.