Aditya Birla Group owned Essel Mining & Industries Ltd has taken the route of value addition and diversification after losing one of its prized mines- Jilling at Odisha’s online auctions. The lease validity of this iron ore blocks expired on March 31, 2020 followed by which it was put up for auction.
Essel Mining filed a petition stating that it could not continue mining operations over Jilling-Langalota Mining Lease for 39 months, i.e. 3 years and 3 months, the period during which its application for resumption was pending before this Hon’ble Court despite having all statutory clearances and for reasons beyond the control of the Applicant. However the case hearing on auctioned mine still remains pending in Supreme Court.
“Though Essel Mining participated in Odisha’s online auctions, it failed to grab a new mine. Also, it lost its operative mines to more aggressive bidders. The company’s Koira lease is scheduled to expire in August 2021. As a result, Essel Mining’s revenue visibility from iron ore mining business is dimming. The company is now banking on value addition”, said an analyst tracking iron ore sector.
In line with its future growth strategy, Essel Mining has acquired a one million tonne iron ore beneficiation cum pollicisation plant under construction from Pro Minerals Pvt Ltd through corporate insolvency route monitored by National Company Law Tribunal (NCLT). The plant is expected to contribute Rs 80-100 crore of Ebitda (earnings before interest, taxes, depreciation and amortisation) annually post full ramp-up of operations.
Essel Mining is bidding for a mining MDO (Mine Developer Cum Operator) for the 5.4 million tonne per annum (mtpa Madanpur – South coal block, allotted to Andhra Pradesh Mineral Development Corporation Limited. In addition, EMIL has emerged as the winning bidder for the Bunder diamond project in Madhya Pradesh. Both the Madanpur – South and Bunder greenfield mining projects have long gestation periods and would entail sizeable capital outlay from FY2023.
“EMIL’s ability to seek requisite regulatory approvals, overcome challenges associated with land acquisition and R&R9 activities, and arrange project funding, while maintaining healthy debt metrics would remain key rating drivers”, the analyst added.
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