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National Aluminium May Invest $3.8 Billion to Buy Coal Mine in Indonesia
Sep 3,2010 08:56CST
industry news
Source:SMM

Sep 2, 2010(Bloomberg)--National Aluminium Co., India's second-largest producer of the metal, may spend $3.8 billion buying a coal mine in Indonesia to secure fuel for its planned power plant in East Kalimantan province.

The company is in talks with Indonesian firms, B.L. Bagra, director of finance at the Bhubaneswar-based National Aluminium, told Bloomberg UTV in an interview today.

National Aluminium plans to spend $4 billion building an aluminum smelter and a coal-fired power plant in East Kalimantan on the Borneo island in a joint venture. The metal maker is expanding overseas to tap rising demand from automakers and builders in emerging markets and China.

National Aluminium, which owns 76 percent of the smelter venture, is also looking for a strategic partner for the project, Bagra said.

Shares rose 0.5 percent to 405.15 rupees at 12:02 p.m. in Mumbai. The benchmark Sensitive Index rose 0.4 percent.

The Indian company is seeking a coal mine with 500 million metric tons of resources that can produce 10 million tons annually starting in 2014, according to an Aug. 31 statement. Sellers have 30 days to submit offers, the statement said.

National Aluminium needs 8 million tons to 10 million tons of coal a year, of which about half will be used to feed the East Kalimantan power plant. The company is seeking fuel with an energy value of more than 5,000 kilocalories a kilogram.

RAK Minerals & Metals Investments, a unit of RAK Investment Authority, holds 24 percent of the Indonesian venture. RAK Minerals is based in the United Arab Emirates.
 

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