Global Steel to invest $1.1 bn in Montenegro

Global Steel Holdings, the offshore investment arm of the Pramod-Vinod Mittal controlled Ispat Industries, will invest $1.1 billion (Rs 4,440 crore) in Montenegro.

The investment follows Global Steel's recent acquisition of coal mines in Ivangrad, which have reserves of 150 million tonnes, in Montenegro. Global Steel will invest $600 million for rehabilitation of mines and $500 million for a 500 mw power plant.

The mines in Ivangrad have a coal washing and separation plant that can produce sized and washed coal. Ivangrad is located 140 km north-east from the capital of Podgorica.

There is a coal washing and separation plant attached to the mines that can produce sized and washed coal. The company will rehabilitate the existing mines and will also develop six new mines and washing facilities. Post investment, it will have a capacity of 3 million tonnes of coal per annum.

This is Global Steel's fifth venture in the Balkans. It has recently acquired the Magnohrom Refractory in Serbia, Llamkos Steel in Kosovo, Kremikovtzi Steel in Bulgaria and the coke oven company of GIKIL in Bosnia. Global Steel also operates thermal power plants in Bulgaria and Nigeria.

Its acquisition of Llamkos was embroiled in a court case. However, it managed to get control of Llamkos through legal recourse.Global Steel Holdings acquired Kremikovtzi in April 2005.

But at the time of completion of the deal in August 2005, Global Steel found that the erstwhile owner of Kremikovtzi had signed a separate agreement to sell Llamkos to a third party. Kremikovtzi had won Llamkos from Kosovo Trust Agency prior to Global Steel Holding completing its acqusition.

Global Steel operates and manages about 14 million tonnes of steelmaking capacity and associated businesses in mining, energy and logistics in various parts of the world.