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Gujarat NRE Coking to pump in $400 m in mines in Australia

18 Feb 2011 Evaluate

Gujarat NRE Coking Coal Ltd, the Australian subsidiary of the Kolkata-based Gujarat NRE Coke Ltd, will invest about $200 million a year over the next two years to complete the expansion and modernisation of its coking coal mines here.

The company has invested about A$500 million so far in machinery and for getting the mines into operation. The output is about 1.7 million tones in the current year and will jump to about 2.5 million tones next year. At full capacity it will make over 6 million tones annually.

The total resource in the two mines is about 550 million tones and life of the mine is about 40-50 years with the quality of coal in the top 10 per cent globally. The company is well set to take advantage of the buoyant market conditions of metallurgical coal which ranges around $370-380 a tone on the spot market against about $225 at the beginning of the current quarter. The supply constraints following the flooding of mines in Queensland which accounts for about half the global supply of coking coal is driving prices.

The parent company will expand the metallurgical coal production capacity through two more plants in India. Its present capacity is about 1.3 million tones distributed across three units in Jamnagar, Khandla and Dharwad. The addition will be through a 1.5-million-tonne-unit coming up in Krishnapatnam, Andhra Pradesh, at a cost of Rs 1,000 crore, and another will be a brown field expansion.

Peers
Company Name CMP
Petronet LNG 277.65
Bharat Coking Coal 35.95
Linde India 7270.00
Refex Industries 261.25
IRM Energy 253.00
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