Mumbai: Anil Ambani Group firm Reliance Power Ltd  has acquired a 100-per cent stake in three Indonesian coal mines, with total reserves of two billion metric tonnes, for whivh it will pay on the volume of production the mines yield.

Instead it expects to invest around $1 billion over the next eight o 10 years on developinmg the mines and setting up logistics facilities.

The acquisition was made by Reliance Coal Resources Private Ltd, a wholly owned subsidiary of Reliance Power Limited, the company said in a regulatory filing.

The three companies - Srivijaya Bintangtiga Energy, Bryayan Bintangtiga Energy and Sugico Pendragon Energy – are located in the South Sumatra area of Indonesia spread over an area of 40,000 hectares.

Reliance Power can mine up to 40 million tonnes per annum of coal from these three mines and plans to supply coal from these mines to its 4,000-MW ultra mega power project at Krishnapatnam in Andhra Pradesh and also to the Shahapur power project in Maharashtra.

Although the company did not disclose financial terms of the transaction, the payment dfor the acquisition is linked to the actual production of coal. JP Chalsani, CEO, Reliance Power .

P Chalsani, CEO, Reliance Power told CNBC-TV18 in an interview that Reliance Power had acquired 100-per cent economic interest and "we pay when we actually start production of coal."

Reliance Power, which is building power plants across the country, is using a record $3 billion it raised in January in India's biggest initial public offer.

Reliance Coal Resources plans to invest Rs2,400 crore in mine and related transportation infrastructure to take the capacity of these mines to over 25 million tonnes per annum.

For the year ended 31 March 2008, Reliance Power posted consolidated net profit of Rs85.38 crore on total income of Rs133.9 crore.

Since it is a captive coal mine, Reliance Power would be able to protect its coal supplies from price fluctuations, the company said.

Reliance Power has a current market capitalisation of over Rs2,85,000 crore ($71 billion) , net worth in excess of Rs45,000 crore ($11.5 billion), cash flows of Rs11,000 crore ($2.8 billion), net profit of Rs7,000 crore ($1.7 billion) and zero net debt, the company said.

Reliance Power is implementing power projects with aggregate capacity of over 28,200 MW, by far the largest development pipeline in the country.

Reliance Power, on its own and through subsidiaries, is currently developing 13 medium and large sized power projects with a combined capacity of 28,200 MW in the country.

These include projects in western India (12,220 MW), northern India (9,080 MW) and northeastern India (2,900 MW) and southern India (4,000 MW).

Six of them are coal-fired projects (14,620 MW) - to be fueled by reserves from captive mines and supplies from India and abroad, two gas-fired projects (10,280 MW) to be fuelled primarily by reserves from the Krishna Godavari Basin, and four hydroelectric projects (3,300 MW), three in Arunachal Pradesh and one in Uttarakhand.

Reliance Power has acquired the two ultra mega power projects of 4,000 MW each at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh. The 7,480 MW project, to be located at Dadri in Uttar Pradesh, is expected to be the largest gas-fired power project at a single location in the world.