Monnet close to buying coal mine in Indonesia

Monnet Ispat & Energy Ltd (MIEL) on Monday said it is close to clinching a coal asset deal in Indonesia.

“We have a kitty of $100 million to invest in foreign mineral assets in the next two years. We have many options and hope to announce a deal soon,” Sandeep Jajodia, executive vice chairman and managing director of the company said.

The company is also in talks with some companies in South Africa and is expected to announce its first coal mine acquisition abroad in 3-6 months.

The steel and power player has planned an investment of Rs 8,000 crore over the next two years on expansion.

Monnet Power, a subsidiary of MIEL, is currently executing a 1,050 mw thermal power plant in Orissa.

It plans to increase its production capacity to 3,000 mw in the coming years by setting up three more power plants — a 1,320 mw coastal project in Gujarat, a 250 mw plant in Raigarh and another unit in Orissa of 525 mw.

In order to fund this expansion, the promoters plan to sell stake in Monnet Power in January 2012.

Last month, the company sold 12.5% in Monnet Power to US-based Blackstone Group for Rs275 crore.

In steel, MIEL’s current annual production capacity is of 1 million tonne sponge iron and 3 lakh tonne of steel.

By September 2011, it will commission a 1.5 million tonne integrated steel plant in Chhattisgarh.

For the quarter ended June, MIEL has reported an 18.72% jump in net profit to Rs 72.71 crore riding on a similar growth in net sales to Rs420.38 crore.