Four companies — Sophia Power (in which L N Mittal is an investor), Adani Power, KSK Power and Monnet Ispat — are in the race for participating in NMDC’s thermal coal venture. Sources said the companies had made initial presentations, which would be put up to the NMDC board.
NMDC, India’s largest iron ore producer and exporter, is diversifying into thermal coal operations. There are plans to spin them off into a separate company and induct a joint venture partner. The company floated a tender in January to develop coal assets through a public-private partnership.
Refusing to indicate which company was frontrunner for the joint venture, the sources said there could also be multiple deposit-based joint ventures. Sophia Power was a fully owned subsidiary of Indiabulls Real Estate, engaged in the power sector, in which FIM Ltd (managed by Farallon Capital Management LLC) and LNM India Internet Ventures, an investment entity on behalf of L N Mittal and his family, picked up equity last year.
NMDC has been allotted two new coal blocks in Madhya Pradesh and is expecting allotment of another at Birbhum in West Bengal, which happens to be among the five largest coal deposits in the country, with an estimated reserve of two billion tonnes.
In the Birbhum deposit, NMDC has a 50 per cent stake and West Bengal Mineral Development & Trading Corporation has 40 per cent. The other 10 per cent would be with West Bengal Power Distribution Company Ltd. However, NMDC has the right to dilute up to 15 per cent equity in the block.
The Deocha-Pachami block in Birbhum covers 9.7 sq km, while the other two blocks in Madhya Pradesh are smaller.
NMDC has earlier signed memoranda of understanding with companies like Rio Tinto and Spice Minerals and Metals, part of the Spice Energy group, for iron ore.
NMDC’s mines in Karnataka and Chhattisgarh produce around 30 million tonnes of ore, which would be augmented to 50 million tonnes by 2014-15. The public sector miner is a major supplier of ore for steel companies like JSW Steel, Essar Steel and Ispat Industries, that do not have captive mines for all their needs.
Apart from iron ore and thermal coal, the company is planning a presence in coking coal and magnesium. NMDC is in discussions with Kopano Ke Matla Investment Company, the investment arm of South Africa’s largest trade union federation, the Congress of South African Trade Unions (COSATU), for acquiring manganese, coal and iron ore blocks in South Africa.
A working partnership has also been forged with West Australian resources developer, Stirling Resources, to jointly develop mineral opportunities in Australia and New Zealand.
