MOIL Ltd, formerly Manganese Ore Ltd, plans to send a team to Turkey to evaluate mines for a possible acquisition. The government is also looking at an initial public offer (IPO) for a 20 per cent stake sale next month.
G P Kundargi, director (production and planning), told Business Standard many prospective sellers had approached them. “People in Turkey, South Africa and Zambia have approached us to sell manganese ore mines and we will be sending a team soon to Turkey to take matters forward,” he said. Teams to other countries will be sent later.
He said the company was looking forward to these acquisitions and added the manganese ore mines acquired abroad would meet the demand in India.
MOIL has half the market share in India. It has proven ore resources of 22 million tonnes (mt) and probable reserves of nearly 70 mt. The Indian Bureau of Mines (IBM) has pegged the country’s probable reserves at 378 mt and the proven reserves at 138 mt. Manganese ore is an important input in steel making and its use is expected to grow as steel production increases.
The company is planning its IPO launch by the end of November. The central government holds 81.57 per cent stake and will offload 10 per cent. Two state governments, Madhya Pradesh and Maharashtra, hold 9.62 per cent and 8.81 per cent, respectively; each will offer five per cent.
K J Singh, chairman and managing director, said: “We expect to ge the Sebi (Securities and Exchange Board of India) approval for the IPO anytime now.”
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For its expansion, the plan is to invest Rs 768 crore over the next four years for expansion of mines and modernising the equipment and other infrastructure. Last year, the company mined 1.1 mt manganese ore and plans to take this up to 1.5 mt by 2015. Singh said MOIL had signed two 50:50 joint ventures, with Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) for expanding its value-added output.
Singh said, “With SAIL, we are setting up a 75,000-tonnes per year silico manganese unit and a 31,000-tonnes per year ferro manganese plant. The total investment is Rs 400 crore, with a debt to equity ratio of 1:1.” The company expects to commission the plant by June 2012.
He said the joint venture with RINL would see a 20,000-tonne per year ferro manganese plant and a 37,500-tonne per year silico manganese plant. The total investment is Rs 206 crore, again with debt to equity at 1:1. Both companies are equal partners in the project.