The Hindu Business Line : BEML, Midwest Granites, Indonesian co form jt venture

LOOKING FORWARD: Mr V.R.S. Natarajan, Chairman, BEML Midwest Ltd & CMD Bharat Earth Movers Ltd, at a press conference in Hyderabad on Thursday. — P.V. Sivakumar

Hyderabad May 24 In a first of its kind initiative to undertake contract mining of coal globally, the public sector Bharat Earth Movers Ltd (BEML), Midwest Granite Pvt Ltd and Sumber Mitra Jaya (SMJ) of Indonesia have formed a joint venture company.

The joint venture company BEML Midwest Ltd will have an equity of Rs 100 crore. It will target development of opencast mines in the range of 10 million tonnes and explore opportunities both in India and abroad, according to Mr V.R.S. Natarajan, Chairman of BEML Midwest.

Coal Blocks

While BEML, Bangalore, will hold an equity of 45 per cent, the Hyderabad-based Midwest Granites and SMJ together will share the balance 55 per cent, with the former having higher equity, according to Mr Natarajan, who is also the Chairman and Managing Director of BEML.

The business from contract mining is expected to be about Rs 500 crore in the next 4-5 years.

The joint venture is looking for allocation of coal blocks from Ministry with tie-up for coal supply to power plants, Mr Natarajan told newspersons on the eve of announcing the joint venture, with headquarters in Hyderabad, today.

With about 170 coal blocks under allotment, the big jump expected in the mining & power sector has prompted BEML to diversify into the new area, Mr Natarajan said.

In the overseas market, the joint venture will look for coal blocks in Indonesia, Australia and South Africa. For BEML, the joint venture will ensure orders for its equipment and spares without going for tender process, which is expected to add to the bottom line, Mr Natarajan explained.

For the Rs 160-crore turnover Midwest Granites, the responsibility would be for exploration, planning, development and production of coal mines. Its marketing and distribution network will bring strength to the operations, Mr K. Raghava Reddy, Chairman, said.

Bidding for projects

The Rs 540 crore SMJ, the flagship company of the Indonesian Group Mitra Jaya, will bring its wide expertise in contract coal mining and production, to bid for projects in India as well as globally, Mr Govind Swamy said.

The board of the new joint venture will comprise of three directors from BEML and four from Midwest and SMJ of Indonesia.

The Union Minister of State for Coal, Dr Dasari Narayana Rao, formally launched the joint venture at a function where the Minister of State for Mines, Mr T. Subbarami Reddy, and Minister of State for Defence, Mr M.M. Pallam Raju, were also present.

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