Mjunction scouting for key partnerships in coal mining

Written by Pranbihanga Borpuzari | New Delhi, Jun 29 | Updated: Jul 1 2008, 03:16am hrs
Mjunction services Ltd, a joint venture between Tata Steel and Steel Authority of India Ltd (SAIL), plans to enter into a strategic partnership with coal mining companies even as it looks to sell 19 million tonne of coal this year.

We are looking to enter into a strategic partnership with coal mining companies. It can be in the form of a new company that we create or through our existing company, Mjunction managing director Viresh Oberoi said.

Oberoi did not rule out the possibility of creating a special purpose vehicle (SPV) and added that all options were open before the company.

Mjunction is one of the largest e-commerce companies in India and operates one of the biggest online markets for steel in the world. It was formed in February 2001 after Tata Steel and SAIL inked a 50:50 joint venture for an online steel trading company.

Oberoi said he would like to have a pilot case up and running in the next three months. We will start of with a pilot concept once we decide on the partner and see how the concept works out and iron out any differences.

The company has set an ambitious target of selling 19 mt of coal this year and Oberoi sees no problems in the supply and demand side for the business.

Supply will not be a problem because both the coal ministry and Coal India Ltd has projected an increase in production by 40 mt this year. Half of the increased production or about 20 mt will come to us, he said.

The company also looks to scale up its imports and wants coal from Indonesia and South Africa to feed the demands of its clients in the thermal power generation.

On the demand side, Oberoi expects strong claim for the coal he has to sell. Other than utilities, we are supplying coal to everyone. Demand from the cement sector, steel industry and even resellers are strong.

Mjunction has service offerings spanning the entire e-Commerce spectrum and operates throughmetaljunction.in, buyjunction.in, coaljunction.in, autojunction.in and straightline.in.

Business volume of the company in terms of transaction value (TV) for FY08 was at Rs 10,314 crore and the company targets businesses of Rs 15,000 crore for FY09. It expects 25% of revenues to be generated from the coal business.