Bangalore: Engineering firm Subhash Projects and Marketing Ltd and power equipment maker Emco Ltd have agreed to jointly buy 83% of Indonesian coal mine PT Bism for about Rs300 crore, joining Indian firms trying to secure fuel supplies by buying assets abroad.
New acquisitions: Anil Sethi, chairman of Subhash Projects.
“We are jointly taking an 83% stake in PT Bism by acquiring shares from local owners. The deal will be closed in a month,” said Anil Sethi, chairman of Subhash Projects, adding the mine has reserves of about 105 million tonnes (mt).
Subhash Projects will buy equity in the mine through its group company Subhash Kabini Power Corp. Ltd, which owns and operates the Kabini dam hydropower project in Karnataka.
Emco, too, has started power generation operations and is setting up a Rs1,100 crore, 270 MW coal-based power project near Nagpur.
Subhash Projects and Emco, India’s third largest maker of power transformers, will fund the share purchase through a mix of existing funds and debt, Sethi said.
Coal from the mine would initially be sold to Indian customers until the group sets up its own 2,200MW coal-based power plant on the country’s eastern coast.
The location of the plant is yet to be identified.
The project will mark Subhash Projects’ entry into the business of developing coal-based power plants. The group is already executing several small hydel power plants apart from constructing roads and water supply projects in several states.
Tata Power Co. Ltd, Adani Power Ltd, Reliance Power Ltd, GMR Group and ship owner Mercator Lines Ltd have acquired coal mines overseaas.
“We are also looking for a captive port on the eastern coast either in Andhra Pradesh or Orissa to import coal from Indonesia because this would be ideal from a logistic point of view,” Sethi said.
Subhash Projects is developing a Rs2,800 crore port with capacity of 25mt a year in Puducherry through an equal joint venture with Delhi-based Om Metals Infraprojects Ltd.
The port is being developed to handle clean cargo such as containers and liquids, mainly edible oils, and cannot be used to import coal.
The port will become operational in 2012 with capacity to handle 2.65 million standard cargo containers and 200,000 tonnes of edible oils a year, said Jayakumar, chief executive officer of Pondicherry Port Ltd, who uses only one name.
Pondicherry Port is the joint venture company formed by Subhash Projects and Om Metals to develop and operate the new port.