Essar Group buys Indonesian coal mine for Rs909 crore
26 Mar 2010
Ruia family-controlled Essar Group yesterday signed a definitive agreement to buy Aries coal mines in Indonesia as part of the company's strategy to acquire global raw material resources to meet the growing needs of its steel and power sectors.
The acquisition will give Essar an estimated resource base of 100 million tonnes of thermal coal and mineable reserves of 64 million tonnes, a statement said.
Although financial details of the transaction have not been disclosed, analysts estimate the value of the deal at around $200 million (Rs908.6 crore).
The Aries coal mines are located in the Kutai region in the Kalimantan province on the eastern part of Borneo Island. The coal deposit contains high-quality bituminous coal with a calorific value of 6,000 and low-ash, low-moisture content, making it suitable for use in power plants.
Mumbai-based Essar Group is a large Indian business corporation with interests in sectors like steel, energy, power, communications, shipping ports and logistics, and construction. Its operations are spread over more than 20 countries across five continents with annual revenue of around $15 billion.
Essar Power is the country's second largest power generation company in the private sector, with a total capacity of 1,220 megawatts (MW).