Monnet Ispat and Energy (MIEL) acquired PT Sarwa Sembada Karya Bumi, an Indonesia-based coal company, in a deal valued at Rs 108 crore.

The deal, executed through the Dubai-based Monnet Global, provides access to thermal coal mine spread over 25,000 hectares. Currently, 1500 hectares have been explored, establishing 65 million tonne of coal reserves. Monnet Ispat expects the reserves to go up substantially after complete exploration of the total area.

Mr. Sandeep Jajodia, Executive Vice-Chairman and Managing Director, Monnet Group, said the mine has an excellent logistic facility. Coal shipped from the mine will be more cost effective and will have less transit time to India. Besides, it is a best fit for our planned coast-based power projects.

“We plan to mine more coal than required for our captive needs, for selling in the open market. The worldwide coal markets are expected to do very well in the coming years with India and China remaining strong buyers,” he said.

“We have been able to close the deal at a very low value as the agreement with PT Sarwa was initially executed in 2008; however, the process and regulatory procedures for actual transfer took a long time to finally close the deal,” said Mr. Jajodia.

MIEL has manufacturing facilities at Raipur and Raigarh in Chhattisgarh and is currently implementing 1.5 mtpa integrated steel plant at Raigarh with an investment of Rs 4,500 crore.

Monnet Power Company is at present executing a 1050 MW IPP in Orissa backed by captive coal mines. The project consists of two units of 525 MW to be supplied by BHEL. The project has all its statutory approvals and clearances in place and has achieved financial closure. Both these units are expected to get commissioned between September and December 2012. The company is now in the process of developing an additional 2000 MW which is expected to come up by June 2014.

Shares of the company were down 0.88 per cent at Rs 522 on Monday.

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