Binani to form JV to buy R’than lignite mine

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Mumbai, Jun 6 : Binani Cement Ltd, a flagship company of the Braj Binani Group, will soon enter into a JV with the Rajasthan State Mineral Development Corporation (RSMDC) and Gujarat State Mineral Development Corporation (GSMDC) for mining lignite, which will be used as an alternative fuel for its 75 mw captive power plant in Rajasthan. The company will invest to the tune of Rs 500 crore in the JV and the funds will be raised through a mix of debt and equity.

Talking to FE, Vinod Juneja, MD, Binani Cement,said, “The lignite mines are in Nagur district, Rajasthan and we expect to finalise this in the next 2-3 months. These are huge reserves which will take care of our requirements for the next 30 years.”

Moreover, the company will also require this lignite to set up a 100 mw power plant that will be required for mining of this lignite. Binani Cement Ltd shares on Friday were down 0.08% to close at Rs 59.55 on the Bombay Stock Exchange. The government of India had allocated lignite mines to the company in February 2007 as captive use for power generation and the mining licence application was in progress with the state government since then.

The company has appointed Gustavson Associates, USA as consultants for feasibility study under USTDA grant of $ 2,56, 142.

RSMDC was incorporated in 1997 to give boost to the mining activities in the state and to provide a scientific and systematic approach to mining activities and looks for tie-ups for supply of lignite for power plants in Rajasthan. Similarly, GMDC has been mining lignite from Kutch since 1974 at Panandhro.

The company at present buys coal from the spot market for its requirement of cement manufacturing. Going forward it plans to acquire to a coal mine in Indonesia with an investment of about $100 million.

“We will acquire the mine which is close to the ports in Indonesia. We are in an advanced stage of negotiation there and by end of August-September this year, we hope to start operations of Indonesian mines,” revealed Juneja.