Financial Daily from THE HINDU group of publications
Tuesday, Jul 05, 2005
Corporate - Mergers & Acquisitions
Gujarat NRE jt venture acquires coal mining leases in Australia
Mumbai , July 4
GUJARAT NRE Coke Ltd has announced that its Australian joint venture company, Gujarat NRE FCGL Pty Ltd, has entered into an agreement to acquire the coal mining leases in the whole of old Avondale Colliery and part of Huntley Colliery in the Southern Coalfields of New South Wales, Australia.
According to information made available to the stock exchanges, the acquisition and development of the mines will cost about A$80 million (Rs 260 crore).
With this, the investment by the Indian company in the New South Wales coal mines would cross A$100 million (Rs 325 crore).
The acquisition, subject to Ministerial approval, also proposes to rename the colliery as NRE No 2 Colliery.
The leases being transferred comprise approximately 5,500 hectares within the Illawarra Coal Measures of the Sydney Basin-Wongawilli and Tongarra seams.
Both have been mined previously in the adjoining leases producing high-fluidity, low-phosphorus coking coal. The total recoverable reserves are expected to be in the order of 96 million tonnes.
Mr Arun Jagatramka, Vice-Chairman and Managing Director of Gujarat NRE Coke Ltd, said: "This strategic investment further strengthens the position of our company in the southern coalfields of New South Wales, which is renowned for producing high-quality hard coking coal. The investment makes sense given the mine's vicinity to our NRE No 1 Colliery and the potential benefits of ownership in two nearby collieries."
Four months back the company had announced that its NRE No 1 Colliery had started production ahead of schedule.
While the current exports from the region are to the tune of 7.5 million tonnes a year, the Indo-Australian joint venture is targeting exports of one million tonnes by June 2006.
The production target by the joint venture company is 3.5 million tonnes by 2008.
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