NMDC, an Indian state owned Iron ore mine, is looking forward to buy Shree Renuka Sugar’s Indonesian Coal mine. NMDC has done with primary investigations and due diligence.
[su_quote]NMDC official mentioned to media, “Due diligence on the asset owned by Indonesian stock exchange-listed PT Renuka Coalindo Tbk is almost finished and the report is likely to come by the end of the current month”.[/su_quote]
After evaluating the due diligence report, officials of the state-owned company will visit the mine in Jambi province of Sumatra for a first-hand assessment and based on their feedback, a decision on the acquisition will be taken, he said.
Shree Renuka Energy, a Shree Renuka Group company, owns the mine through its listed subsidiary PT Renuka Coalindo Tbk.
The concession for the Jambi Prima Coal Mine, spread over 1,000 hectares, was acquired by the company in 2008 and production started in April, 2010.
According to Shree Renuka Energy’s website, it is one of the largest Coal mines in the Jambi region, with resources of 120 MnT. Currently, it produces of 1 MnT pa of Coal and it is expected to be ramped up to 5 MnT pa by FY17.
[su_quote]”NMDC does not need thermal Coal at this point of time. The acquisition is mainly for trading purpose and not for internal consumption. India needs a lot of thermal Coal. The acquisition is aimed at minimizing the supply deficit,” the official said.[/su_quote]
However, the company may use Coal from the mine after its proposed 500 MW power plant in Uttar Pradesh goes on stream in about three years. NMDC has been already allocated thermal Coal mines to feed these plants.
As per SteelMint research, India has imports around 181 MnT Coal and in view of widening demand; imports will rise and touch new heights.
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