Kolkata: Gujarat NRE Coke will invest around Rs700 crore in its greenfield plant in Andhra Pradesh over a period of three years, a top company official said.
Vice-chairman and Managing Director of Gujarat NRE Coke Arun Kumar Jagatramka said here through video conferencing that the company would invest Rs350 crore in a 1 million tonne coke plant in the state.
He said that the company had already acquired 200 acres of land for the purpose.
The company would also spend Rs50 crore for setting up a coal washery there and subsequently another Rs300 crore would be invested for setting up a waste heat recovery unit, official added.
The entire investment would be funded through a mix of debt and internal accruals, Jagatramka said.
He said the decision to set up the plant there was taken because of the presence of a strong user industry base comprising secondary steel producers.
The company would import coking coal from its mines in Australia for conversion into coke in the AP plant.
He said due to increased prices in coke, the company had been able to earn positive cash flow this year unlike the previous fiscal.
The company was in the process of substantially raising the production of coking coal from its overseas mines in Australia and New Zealand from 1 million tonne and present to 7 million tonnes.
Jagatramka said the total investment required for ramping up production of coking coal would be $400 million to $450 million (over Rs1,683-1894 crore).
The entire money would be invested over a period of four years, Jagatramka said.
He said the cash flow generated from its Australian outfit Gujarata NRE Australian Mineral Resources would be utilised for funding the investment.
The company was the largest merchant producer of coke. It has also 22 windmills in the Kutch region of Gujarat, and was in the process of adding 20 more, which would take up the total power generating capacity to 87.5 MW.