Date:01/12/2005 URL: http://www.thehindubusinessline.com/2005/12/01/stories/2005120102180300.htm

Back Visa group acquires coalmine in Australia

Ambarish Mukherjee

New Delhi , Nov. 30

KOLKATA-based Visa Group has acquired a coal mine at Queensland in Australia.

Visa Steel, which is setting up a 1.5-million-tonne steel and stainless steel plant in Orissa, will source its coking coal from this Australian company at a concessional rate.

Queensland-based coal mining company Millennium Coal Pty Ltd has been acquired by Visa group's Switzerland-based Visa Comtrade AG, the company Chairman, Mr Vishambhar Saran, told Business Line. But he declined to disclose the investment made in the mining venture.

He said Visa Steel and Millennium Coal has tied up for a long-term buyback arrangement of five lakh tonnes of coking coal per annum and it would be at JSM (Japanese Steel Mill) price, which is on an average less by $2-5 per tonne compared to what other steel producers pay while buying coal from the international market.

"This has been possible because both are under the same group and it also ensures availability of raw materials," Mr Saran said.

He said the first phase of five lakh tonnes per annum capacity would become commercially operational by December 2007, while the coke oven plant is schedule to be commissioned in March 2006.

For the first phase, the company has already invested Rs 250 crore.

"We would be investing another Rs 1,146 crore for completing the project out of which Rs 750 crore is being raised by a State Bank of India (SBI)-led consortium, he said. He added, "Our production cost will be low as the company enjoys a strategic advantage of being close to all raw materials, port and railway network."

The company is eyeing a market share of around 25 per cent once it goes on stream. It, however, has no plans to go public. While arrangements for coking coal has been worked out, the plant will be fed iron ore by Orissa Government agencies on a short-term basis.