Valu Investments will be jointly owned by Jaimin Vyas, an entrepreneur, investor and project developer in the infrastructure sector, and IL&FS Energy Development Company, an Indian company specialising in the energy infrastructure space.

ResGen has granted Valu the right to own, build and operate two coal-fired power stations – one a 200MW and the other 1200MW – adjacent to the mines as an independent power project.

Valu has also entered into a 20-year export coal offtake contract for 1 million tons per annum of coal, with supply after production commences at the Boikarabelo mine.

Following the commencement of stage two of mine production, the volume increases to 2 million tons per annum.

ResGen said that in conjunction with these new deals, an existing 0.5 million tons per annum contract with Bhushan Steel Limited was terminated with no penalty payable by either party. Feasibility study arrangements with CESC Limited have also been terminated with no penalties.

Export coal contracts for the mine’s first three years include 1mtpa to CESC, 1mtpa to Valu and 0.5mtpa to Noble Group. When stage two of production begins, estimated to be eight years after initial production, CESC will purchase 4mtpa, Valu 2mtpa and Noble will remain at 0.5mtpa.

The Boikarabelo project is expected to produce an initial 6Mtpa, split equally between export and domestic coal.

It has probable reserves of 744.8Mt of coal on 35% of the company’s tenements.