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Friday, 26 March 10
ESSAR GROUP SIGNS DEAL FOR INDONESIAN COAL MINE - BUSINESS LINE


Looking ahead
The coal from the Indonesian mine would provide raw material to the group's power projects
The Aries coal mines acquired by the group are located in the Kutai region of East Kalimantan
Gets access to 100 million tonnes of thermal coal

The Hindu Business Line reported that, Less than a month after it acquired a coal mine in the US, the Essar Group has signed an agreement to buy Aries coal mines in Indonesia for an undisclosed amount.

The deal gives Essar Power access to an estimated resource base of 100 million tonnes of thermal coal and mineable reserves of 64 million tonnes. The transaction is subject to regulatory approvals and expected to be closed next month.

On March 6, the group, through its subsidiary Essar Minerals, Delaware, and Denham Capital, an energy and commodities-focused global private equity firm, acquired US-based Trinity Coal Partners LLC for $600 million from Boston-based Denham Capital.

The coal from Trinity would also be used for the Essar group's steel plant in Algoma, Canada.

Essar Power, the second largest private power producer in India, has promoted six projects to ramp up its capacity from 1,220 MW to 6,100 MW by 2012. The deal to acquire coal mines in Indonesia is part of its strategy to achieve backward integration and secure raw material.

The Aries coal mines are located in the Kutai region of East Kalimantan. The high-quality bituminous coal has gross calorific value of 6,000 with low ash and moisture content that suits power plants. Production from the Indonesian mine is expected to start in a year.

Mr Anshuman Ruia, Director, Essar Group, said, “The Indonesia mines are an excellent addition to our growing portfolio of coal assets. The acquisition adds another 100 million tonnes to our existing thermal coal resource base of about 275 million tonnes in India.” To read more
The Hindu Business Line



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