The Hindu Business Line : Monnet Ispat set to acquire manganese mine in Africa

MONNET Ispat Ltd has decided to move beyond Indian shores and acquire mines abroad. The company is in an advanced stage of negotiations with an African company for acquiring a manganese ore mine in Africa.

Sources involved in the negotiation process told Business Line that the company is planning a 100 per cent buy-out of a manganese ore mine with an estimated reserve of around 18 million tonnes. "The company is also contemplating setting up of a ferro-manganse unit there as power is very cheap there," the sources said.

Senior representatives of the company are in London trying to give a final shape to the deal that is likely to be sealed in the next few weeks, sources said.

The company's plan to acquire manganese mines in Europe earlier this year did not take off, though the company had had talks with many players in the field.

Acquisition of manganese ore mines is part of the company's backward integration process. The company manufactures sponge iron and steel. Earlier, as part of backward integration, the company had started producing coal from its own mine thereby saving substantially on input costs.

Captive coal mining would eventually bring down the company's cost of coal to Rs 500 per tonne compared to Rs 1,500 at which it buys from Coal India. This alone would result in an annual saving of around Rs 45 crore that will add to the bottomline, company sources said.

The company's ongoing expansion plan for adding five lakh tonne capacity at its Raigad plant would go on stream this fiscal and would add substantially to its total turnover, sources said.

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