Coal mines begin to attract private investors

Coal, which until recently was considered an essential resource only for thermoelectric power stations and was the cause of holes in the budget and of social tensions in mining areas, has turned into a business opportunity. Due to higher prices for natural gas, the production of solid fuel as an alternative in residential heating is starting to attract investment, according to yesterday’s edition of the weekly BUSINESS Magazin.

“The price of natural gas will reach around 270 euros per thousand cubic metres by 2007. This will mean residential heating using gas will no longer be profitable”, said Dinu Patriciu, chairman of Rompetrol group, one of the new players on the emerging market of alternative solid fuel (briquettes) production.

Rompetrol will invest some 20 million euros in the construction of a plant on the Midia platform and in the development of a distribution network.

It will produce briquettes based on waste oil products from the Petromidia refinery using its own technology. The plant would produce a quantity of 500,000 tonnes of fuel each year, the equivalent of 4-5% of the potential market, said Patriciu.

“Our objective is to reach a 10% market share within two to three years,” said the Rompetrol chairman.

He is also considering the possibility of expanding the business to using coal as a raw material for solid fuel. “As the market develops, we will also analyse this opportunity,” he said.

The market the Rompetrol head was referring to is largely made up of the urban population that uses wood for heating.