The Hindu Business Line : GMDC plans four-way business foray

Ahmedabad, May 7 Gujarat Mineral Development Corporation (GMDC) plans to leverage its coal-control capabilities into a four-way business foray into cement, power, SEZ and port in Gujarat.

It plans to supply coal to a cement maker in one district and to a power plant in another, both in separate joint ventures.

The cement maker would acquire equity in the power plant and also jointly develop a mineral-based SEZ and a port with GMDC. Thus, GMDC would have a captive coal customer each in a cement plant as well as a power plant; the power plant would have a captive customer in cement plant and the cement maker would have a captive power plant, according to company sources.

Joint ventures

GMDC is setting up a cement plant in joint venture with Jaiprakash Associates in Kutch district of Gujarat. To power this cement plant, GMDC would have another joint venture with the Gokul Group to set up a lignite-based power plant in Surat district.

While GMDC will have equity in both, the cement plant will have equity in the power plant.

GMDC and Jaiprakash, which had signed a shareholders’ agreement for setting up a 2.4 million tonne per annum (MTPA) capacity cement plant in Kutch in January 2007, have now scaled it up to six MTPA. In the first phase, the joint venture would invest nearly Rs 700 crore in the cement project. They have also identified the site for the proposed cement plant near Lakhpat.

The plant would be set up in a 500 hectare area, close to village Sinapur.

To facilitate power supply to this cement plant, GMDC has signed an MoU with the Gokul Group, an oilseed processing major, to form Gujarat Gokul Power Ltd. It would set up a 135-MW lignite-based power plant at Tadkeshwar in Surat district. This area has lignite deposits to the tune of 350 lakh tonnes with a lifespan of 35 years.

The power plant would need 10 lakh tonnes of lignite a year. GMDC would have 26 per cent equity in this power company with a right to buy 75 per cent power and allocate it to the cement project in Kutch.

With this captive power plant and the cement plant, GMDC is leveraging its “coal control” capacity to turn it into components of infrastructure development, such as power, cement and port.

“We are also exploring whether we can have a port in Kutch at a suitable site and a captive jetty for cement companies and a mineral-based SEZ,” the source added.

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