Coal news and updates

Sesa Sterlite key player in upcoming coal auction

Sesa Sterlite’s (SSTL) underperformance in our view has been more driven by a lack of any positive news flow…

SSLT would be a key player in any auction process: Given 8 GW of power  capacity with nearly 5 GW effectively tied to aluminum, SSLT is likely to be a  key player in any coal auction process. As of now, most of SSLT’s power  capacities are not operating at any where close to full utilisation for a range of  regulatory issues with coal availability a key operational constraint. In our view, regulatory approvals should start coming through over the coming months  and access to captive coal should be a game changer.  Captive coal would not only result in lower costs, but also allow for  substantially higher aluminum production, even with imported alumina.

Assuming  approvals for power plants come through, we believe captive coal would  allow 1.5 MT of aluminum production to ramp up, which even on imported  alumina, would generate $1.1.2 billion of Ebitda over the next 2-3 years  which is currently not in our or street

Source: The Financial Express