Sadbhav Engineering eyes own mining projects overseas

On the back of a successful bid of Rs 245.24 crore with Northern Coalfield to remove overburdens in the extension of open cast coal mining at Bina in Madhya Pradesh, Ahmedabad-based Sadbhav Engineering is now eyeing overseas markets for undertaking its own mining projects.

The company is surveying potential coal fields in Indonesia and South Africa and will finalise suitable locations within the next six months or one year.

Initial assessments indicate that the coal procured in South Africa could be of A grade, the highest quality of coal while that in Indonesia could be of B grade. Based on the quantity obtained from mining, the company plans to sell the coal in India and abroad. Currently, the price of A grade of coal is around Rs 3600-Rs 4000 per tonne in India.

Over 72 per cent of the company's revenues comes from roads. Irrigation makes up around 15 per cent of revenues while mining is close to 10 per cent. However, in the next three-four years, the company expects the mining vertical alone to earn around Rs 1000 crore, post-expansion.

"There is a requirement of 120 million tonnes of coal per annum in India which translates into removal of six to eight times of consolidated or unconsolidated materials called overburden that overlies a coal deposit.

Therefore the market for such projects is huge in the country and abroad in any coal project," Sadbhav Engineering CMD Vishnubhai M Patel said.

Sadbhav will also upgrade infrastructure and install machinery worth Rs 80-Rs 100 crore in the near future.

The Bina project is the second mining contract bagged by the company and involves removal of overburden that occurs during excavation of the mine.

The company will hire equipment such as excavators, dumpers, drills, bulldozers, graders and water tankers for composite work. The work will include blast-hole drilling, excavation, blasting, loading and transportation of broken rocks, earth and soil.

Between July and September 2007, the company has bagged three fresh contracts worth about Rs 358.64 crore for road projects.

This includes a contract of Rs.162.21 crore for construction of a new four-lane Agra bypass on National Highway 2 connecting National Highway 3 in Uttar Pradesh, a joint venture with JMC Projects (India) Ltd.