Tata Power Corporation Ltd. (TPCL) plans to buy about Rs 12,000 crore in coal from its Indonesian mining company this fiscal year.

The company owns 30% of the mine and has sought shareholder approval at an upcoming meeting after its audit committee approved the deal, as the order would be a related party transaction. Coal is priced at arm’s length, and an independent valuer has valued the transaction.

Coastal Gujarat Power merged with Tata Power in April and signed a long-term coal supply agreement with PT Kaltim Prima Coal (KPC) in 2008. The agreement includes all amendments to the purchase of coal from KPC and the price with the Indonesian government.

“The transaction between the two companies not only contributes to the smooth running of both companies’ business operations but also ensures the continued flow of goods and services of the required quality and quantity, and generates revenue and business that meets their business needs,” Tata Power said in a note to shareholders.

The company said the coal sales agreement between Tata Power and KPC is valid until the financial year 2032-33 (FY33) but will only seek shareholder consent this financial year.

Tata Power is also seeking approval to award a construction contract worth Rs 2,930 crore to the joint venture Tata Projects (TPL). Tata Power holds a 47.78% stake in TPL, with the rest owned by its promoter Tata Sons. Following the bidding process, the company said it had placed orders with TPL to execute flue gas desulphurisation (FGD) projects at its 4,150 MW Mundra thermal power generation plant and 447 MW Jojobera plant.

The project will be executed between FY23 and FY25, with orders placed after the audit committee approves the transaction. Tata Power also intends to undertake other construction projects with TPL for the remainder of the financial year.

Tata Power has signed several agreements with the listed company Tata Steel. Tata Power sells electricity to Tata Steel for manufacturing facilities and distribution. Tata Power also sells and stores spare parts used in its manufacturing process.

At the same time, Tata Power provides charging services for TSL, and TSL provides coal-to-electricity conversion. The company said its audit committee had recommended signing a TSL-related party transaction (RPT) worth Rs 2,630 crore during the current fiscal period.