India's JSPL In Race For Mongolian Coal Project

Naveen Jindal-controlled Jindal Steel & Power Ltd (JSPL) is in the race for Mongolia’s Tavan Tolgoi coal project, one of the 10 biggest deposits in the world.

Vikrant Gujral, vice-chairman and CEO, JSPL, said: “We had made a presentation before the Group of Ministers. We have been informed that we are one of the shortlisted bidders for a 49 per cent stake in Tavan Tolgoi. This is a big deposit and we are the only Indian company to be shortlisted.”

Tavan Tolgoi has six billion tonnes of coal, of which two billion is coking. The balance 51 per cent stake would be held by a government-owned company. Though Gujral did not specify the value of the deal, pointing out that this would have to be studied, industry sources said it could run into billions of dollars as it is an operational mine. He said most Indian companies have been eyeing smaller mining companies, while adding BHP and Brazil’s Vale were also in the fray.

Gujral said the coking coal could be transported to cater to JSPL’s steel plants in India. However, he pointed out that Mongolia is a land-locked country and the mineral would have to be routed through either China or Russia.

JSPL operates a three-million-tonne plant at Chhattisgarh and has lined up two six-million-tonne plants for Orissa and Jharkhand, for which Memoranda of Understanding have been signed. Moreover, there are plans to add another three million tonnes at Chhattisgarh.

Indian steel companies have been scouting for raw material assets overseas in the past few years. Coking coal accounts for around 50 per cent of the raw material costs and proven reserves of prime coking coal in India are at 4.6 billion tonnes, but production is around seven million tonnes only. Also, the quality of Indian coking coal is poor and has to be blended with imported coal

Source: Business Standard

Indian Government Allocates 23 Coal Blocks

The Indian government is understood to have approved the allocation of 23 coking and non-coking coal blocks to leading steel, cement and power producers, including Essar, JSPL, Grasim, Monnet and Ispat.

While four coking coal blocks have been allocated in Madhya Pradesh, the other 19 non-coking blocks are in West Bengal, Madhya Pradesh, Chhatisgarh, Jharkhand, Maharashtra and Andhra Pradesh, according to the Press Trust of India.

In its meeting held last week, the Screening Committee of the Coal Ministry, headed by Coal Secretary H C Gupta, decided to allocate the Behrabandh coking coal block to Vinod Mittal-led Ispat Industries on a sharing basis with Essar, Mukund Steel and Ind Synergy.

Of the total 170 million tons reserves, Ispat Industries was allocated 70 million tons, while Essar and Mukund 53 and 25 million tons respectively. Orissa's Ind Synergy got the rest.

Coking coal is a major raw material for steel making in addition to iron ore.

The committee has also approved the Urtan coking coal block, which has an estimated reserves of about 42 million tons, to Jindal Steel and Power Ltd and Monnet Ispat on a sharing basis.

The Urtan North coking coal block with estimated reserves of about 54 million tons was approved for Bhushan Steel and Prakash Industries.

Of the major non-coking coal blocks, Moira and Madhujore (North and South) in West Bengal were allocated to Adhunik Group on a sharing basis with Uttam Galva, ACC, Vikas Metal and Power Ltd, Mideast Integrated and Ramsarup Lohh Udyog.

The block has a reserve of over 685 million tons, of which Adhunik Group was allocated the maximum 30 per cent of the total reserves.

Source: Press Trust Of India