The Hindu Business Line : Monnet Ispat plans to boost captive mine capacity

With an investment of about Rs 100 crore in phases, this would make it the largest underground coal mine in the country in terms of output, the Monnet Ispat Vice-Chairman and Managing Director, Mr Sandeep Jajodia, told Business Line here.

"The mine has a reserve of 126 million tonnes of coal. Even if we mine 1.5 million tonnes annually, it will still last for a long time," he said. The company started coal production from its captive mine in May this year and it is currently producing around 100 tonnes a day. Its current coal consumption is approximately 1,200 tonnes daily.

The company hopes to increase its production of coal to 1,200 tonnes a day by December this year to match the daily consumption. As of now, Monnet buys coal from Coal India Ltd. With captive coal production, the company hopes to save around Rs 35-40 crore annually, Mr Jajodia said. The company is also setting up a 3.5 lakh-tonne sponge iron plant at Raigad near its coalmine. "It is a greenfield project located close to our mine. The total cost is around Rs 235 crore and currently, we are acquiring the land. Hopefully, land acquisition will be over by the end of this month. We also expect financial closure within the next few days," he said.

Of the total expansion cost of Rs 235 crore, Rs 155 crore will be through debts and the remaining Rs 80 crore will be in the form of equity.

Citibank has already chipped in around Rs 43 crore in the form of equity in the company. With SBI Capital being given the mandate for mopping up the debts, the SBI group banks are expected to bring in a "substantial" amount while the promoters are to pump in another Rs 24 crore as fresh equity through the preferential allotment route.

The remaining Rs 13 crore will be from internal accruals.

The proposed new plant will require around 1,500 tonnes of coal per day. According to Mr Jajodia, physical work for the new plant is expected to commence by the end of the current quarter and completed in 15 months.

Post expansion, the company's daily coal requirement for its two plants will be around 2,700 tonnes per day, which will be sourced from its captive mine.

This would make it the largest underground coalmine in the country, Mr Jajodia said.