Gujarat NRE Coking Coal Ltd, the Australian subsidiary of the Kolkata-based Gujarat NRE Coke Ltd, will invest about $200 million a year over the next two years to complete the expansion and modernisation of its coking coal mines here.
The subsidiary listed on the Australian stock exchange operates two coking coal mines at Wollongong about 75 km south of here. It has raised A$72 million from “sophisticated investors” recognised by the Australian Securities Commission.
Addressing reporters at the mine site, Mr Arun Kumar Jagatramka, Chairman, said while expanding coking coal output here the parent company will expand the metallurgical coal production capacity through two more plants in India.
Its present capacity is about 1.3 million tonnes distributed across three units in Jamnagar, Khandla and Dharwad. The addition will be through a 1.5-million-tonne-unit coming up in Krishnapatnam, Andhra Pradesh, at a cost of Rs 1,000 crore, and another will be a brownfield expansion, he said.
The Krishnapatnam project is awaiting the Environment Ministry's clearance.
At Wollongong, the subsidiary also owns a one-sixth share in coal terminal located about 17 km away in Kembla which is to be expanded. Six major companies operate mines in the region and the through put through the port was about 14 million tonnes and this will be expanded to about 25 million tonnes.
The company is well set to take advantage of the buoyant market conditions of metallurgical coal which ranges around $370-380 a tonne on the spot market against about $225 at the beginning of the current quarter. The supply constraints following the flooding of mines in Queensland which accounts for about half the global supply of coking coal is driving prices.
The company has invested about A$500 million so far in machinery and for getting the mines into operation. The output is about 1.7 million tonnes in the current year and will jump to about 2.5 million tonnes next year. At full capacity it will make over 6 million tonnes annually.
The total resource in the two mines is about 550 million tonnes and life of the mine is about 40-50 years with the quality of coal in the top 10 per cent globally, he said.
Gujarat NRE Coke has announced on its Web site that its subsidiary Gujarat NRE Coking Coal Ltd has raised Rs 320 crore through an institutional placement done through book building mechanism.
The placement which opened on February 16 closed on the same day. Supported by a group of new and high-quality institutional investors, it raised the funds through the issue of 100 million fully paid ordinary shares at 72 cents each.
Gujarat NRE Coke's stake in the subsidiary is now at about 69 per cent against 77 per cent prior to the issue.