×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

NMDC fails to acquire Kolmar Coal

NMDC fails to acquire Kolmar Coal
Comment E-mail Print Share
First Published: Mon, Jun 27 2011. 12 04 AM IST
Updated: Mon, Jun 27 2011. 12 04 AM IST
New Delhi: State-owned miner NMDC Ltd has failed to acquire the mines of Kolmar Coal Co., with the Russian firm selling a 51% stake to oil trader Gunvor International BV.
NMDC, India’s largest producer of iron ore, has been eyeing the deal since last year and was set to appoint Deloitte Touche Tohmatsu India Pvt. Ltd as a financial adviser for the acquisition, valued at around $400 million (around Rs 1,800 crore today).
Also See | Overseas Bid (PDF)
“The deal is off for NMDC,” said a person aware of the development who did not want to be identified.
“Fifty-one per cent of Kolmar Coal Co. has been sold to Gunvor Holdings,” said a second person familiar with the matter who also requested anonymity.
Kolmar Coal is owned by Intergeo, a mining subsidiary of Russian billionaire Mikhail Prokhorov’s Onexim Group. Gunvor International is an independent energy company with a significant presence in Russian hydrocarbon sector.
A Gunvor International spokesperson said in an email that “nothing has yet been formally announced,” and declined comment “on this potential transaction”. Questions emailed to an Onexim Group spokesperson remained unanswered at the time of going to press.
Mint had reported on 24 March that NMDC was looking at the acquisition.
An NMDC spokesperson didn’t respond to a query seeking comment and a Deloitte spokesperson declined to comment on the matter.
A Deloitte executive confirmed the development and said: “Since someone else has bought it, there was no reason for appointing Deloitte.” He declined to be named.
NMDC, with its iron ore production capped under 30 million tonnes, is setting up steel plants in Chhattisgarh and Karnataka, which will help it gain a toehold in the steel business where demand outstrips supply. The company plans to leverage the easy availability of iron ore from its mines to meet domestic steel demand that continues to rise as the economy expands.
To make steel, NMDC also needs coking coal, which is in short supply in India.
NMDC is also a part of International Coal Ventures Pvt. Ltd set up by state-controlled firms, including NTPC Ltd, Steel Authority of India Ltd, Coal India Ltd and Rashtriya Ispat Nigam Ltd, to secure coal assets overseas. The firm has been unable to close any deal.
Global coal consumption grew 7.6% to 250 million tonnes of oil equivalent (mtoe), according to the BP Statistical Review of World Energy, with China and India increasing their consumption by 10.1% (54.1 mtoe) and 0.8% (27 mtoe), respectively.
utpal.b@livemint.com
Comment E-mail Print Share
First Published: Mon, Jun 27 2011. 12 04 AM IST