Mining major NMDC has decided not to pursue any acquisition of coal mines overseas on its own due to unattractive asset prices. Instead, it will make use of the newly set up International Coal Ventures Ltd (ICVL) to acquire interests in mines.
Rana Som, chairman and managing director, NMDC, told DNA Money, "We don't want to go ahead and acquire coal mines abroad on our own as the asset pricing is not attractive in the current market conditions. We are a shareholder in the ICVL and we will use that as an opportunity to acquire interests in mining assets."
NMDC was close to acquiring a coking coal mine in Australia and was to invest about $15-20 million in the mine. However, it aborted the exercise when market conditions changed. "We were discouraged by the sudden rise in prices of coking coal and coal assets abroad. We were pursuing an Australian mine. But the price shot up suddenly," Som said.
NMDC also has a tie-up with Rio Tinto to scout for mining assets and the working group set up for locating these assets is on the job. However, the public sector major is keen on pursuing domestic coal mines on its own and is already in talks with some state governments for them.
Meanwhile, NMDC has decided to focus on iron ore and coal, keeping mining activity in other minerals on hold. "We don't want to get into different things. We are not so keen on other minerals," Som said.
The company has its own diamond, magnetite and limestone mines in India. Its diamond mining operations were facing litigations. "We have received some directions from the Supreme Court and we will abide by them. We hope to reopen the mines shortly. There are definite kimberlite pipes in the Panna region. But, we still can't say that we have the diamond mine," he said.
Som, however, asserted that the focus of NMDC, despite having mines of other minerals, would be on bulk material.
Source: DNA
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