Mumbai: India’s largest stainless steel maker, Jindal Stainless Ltd, has signed an initial agreement with two private firms and state-run Mahanadi Coalfields Ltd to form a joint venture, a senior official said.
The joint venture firm will mine coal from two adjacent coal blocks in Orissa and is expected to start mining operations in three years, Director N.C. Mathur told Reuters on Tuesday.
The agreement for the joint venture was signed on Monday.
“We will be able to leverage the strength of the PSU (public sector unit) and the private firms,” Mathur said.
Mahanadi Coalfields will hold 60% stake in the joint venture, while JSW Group and Jindal Stainless will together hold 31%. The remaining stake will be held by Shyam DRI Power Ltd, Mathur said.
The two coal blocks are estimated to have reserves of more than 700 million tonnes, he said. The investment is expected to be less than Rs500 crore, mainly for land acquisition and rehabilitation, he said.
“We will be outsourcing the coal mining,” Mathur said, adding the joint venture plans to float global tenders on a cost-plus basis.
Shares in Jindal Stainless ended 3.9% higher at Rs164.80 in the Mumbai market.