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Resurgere Mines close to doubling iron ore reserves

Resurgere Mines close to 4 mine-lease deals, plans beneficiation and pellet plant

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Resurgere Mines and Minerals India, a Mumbai-based firm that extracts iron ore and sells it to small sponge iron makers in Rourkela district, expects to sign at least four iron-ore leasing deals in Maharashtra in four months.

This will raise its capacity by 100 million tonne to 215 million tonne.

Subhash Sharma, CMD and CEO, Resurgere, said the deals will raise the company’s reserve base by 100 million tonne to 215 million tonne.

The company has set a target of selling 3.75 million tonne iron ore for the current year. “We are targeting to produce 4.25 million tonne of iron ore and will sell 3.75 million tonne at least,” Sharma said. “In the first quarter itself, we have managed to extract 1.9 million tonne of iron ore.”

Last year, Resurgere produced 3.2 million of iron ore and sold 3.16 million tonne.

Sharma said the company is setting up a 1.2 million tonne beneficiation and pellet plant in Maharashtra that will cost Rs388 crore. “We raised Rs250 crore via a GDR issue for this project, Rs38 crore will be used from internal accruals and rest will be debt,” he added.

Amit Sharma, director, Resurgere, said the company has a long-term debt of Rs40 crore and, therefore, raising Rs100 crore more via the route will not be difficult. “Bank of India is the lead merchant banker for the debt,” he added.

In fiscal 2010 Resurgere reported revenues of Rs529 crore, and expects to reach Rs725 crore by FY12. Subhash Sharma expects the domestic market to continue to drive growth.

“The domestic market is good as compared to China and the demand from the small sponge iron makers is strong,” he said.

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