Aditya Birla Group eyes $1-bn stake in Drummond's Colombian coal mines
14 Jun 2012
Aditya Birla Group is in talks to buy a significant stake in the Colombian coal mines of Drummond Company, the largest merchant coke producer in the US, for $1 billion, The Financial Express today reported, citing a person with direct knowledge of the development.
The move comes a year after Itochu Corp, Japan's fourth-biggest trading house, paid $1.52 billion for a 20-per cent stake in the Colombian mines of Birmingham, Alabama-based Drummond.
Mumbai-based Aditya Birla Group is seeking between 20 - 40 per cent of the coal produced in Drummond's Colombian mines at an investment of $1 billion, the paper quoted its source.
The $35-billion diversified Aditya Birla Group requires thermal coal for its flagship company Hindalco, the country's top aluminium producer, and for UltraTech Cement, the country's largest cement producer.
The company is also seeking thermal coal to fire its 750-MW captive power plant, which will supply power to Hindalco's new 359,000-tonne aluminium smelter project at Mahan in Madhya Pradesh.
The company's coal block in Mahan has been mired with environmental clearances since 2006. Although the government gave environmental clearance in 2008, mining was stopped in 2010 after the Forest Advisory Committee declared the area as a no-go zone since the mines were located in heavily-forested areas.