Norden secures big coal contract
A Danish operator will use supramaxes to work a five-year freight deal with Indian energy trader Coal & Oil.
Danish operator Norden has secured a five-year contract of affreightment (COA) with an Indian energy conglomerate using supramax tonnage.
Norden will begin loading the first allotment of five million tonnes of coal in January for trader Coal & Oil on the short haul between Indonesia and India.
Norden will allocate supramax es to work the contract, say sources close to the deal.
The operator is set to move one million tonnes of coal from January 2012 with 12 shipments. From 2013, Norden will carry 20 shipments per year until December 2016, according to the contract.
Norden says Coal & Oil entered the contract to hedge against expected freight-rate rises.No rates have been disclosed but sources say they are favourable for the Danish company.
It is unclear if Norden will charter in additional tonnage to meet its requirements. It currently controls more than 60 handymax and supramax bulkers.
Coal & Oil is better known in the energy industry for its power-plant subsidiary, Coastal Energen Pvt Ltd (Energen), a major supplier in South India. The group, which is controlled by the Ahmed Buhari family, has turnover in excess of $550m and imports coal from Australia, Indonesia and South Africa.
The coal for the Norden COA is intended to cover some of the group’s trading volumes but it is mostly earmarked for energy production at its 1200-megawatt Mutiara Thermal Power Station in Tuticorin.
The COA was brokered by Greece’s George Moundreas & Co, which boasts strong links with the Buhari family.
This is the second major COA signed by Coal & Oil this year. In May, it struck an agreement with STX Pan Ocean of South Korea, which has allocated three to four kamsarmax newbuildings to service the business commencing in 2012. The duration and volumes involved are unclear.
By Yiota Gousas Athens
Published: 22:01 GMT, 20 Oct 11 | updated: 19:18 GMT, 19 Oct 11