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| Bhushan Steel buys Aussie exploration firm |
| Ishita Ayan Dutt / Kolkata Sep 05, 2009, 01:14 IST |
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Ups stake to 60% in Australia’s Bowen Energy, which has large prospecting licence for thermal and coking coal
Bhushan Steel (Australia), part of Delhi-based cold roller, Bhushan Steel group, has acquired a 60 per cent stake in Australian exploration company, Bowen Energy. Bowen Energy has 2,400 sq km of prime exploration ground in the heart of the Bowen basin, close to major mines operated by BHP, Rio Tinto, Xstrata and Anglo Coal.
Nitin Johri, director (finance), Bhushan Steel, said the company has four-five licences for thermal and coking coal. Bowen’s projects also include uranium, but Bhushan’s interest is in thermal and coking coal. In 2006 Bhushan had acquired 15 per cent in Bowen. Johri said this was raised through an on-market offer. The remaining 40 per cent was with institutions.
According to a filing with the Australian stock exchange, the Takeover Panel has received an application from Macrae Holdings (WA) Pty Ltd, seeking a review of the Panel’s decision to okay the stake sale. Neeraj Singal, managing director, Bhushan Steel, said he was not aware of the latest review application, but an earlier one had been rejected. Macrae Holdings has 0.318 per cent stake in Bowen Energy.
Industry sources said the acquisition would be a major benefit for Bhushan Steel. Some Indian steel companies had reaped major benefits from acquisition of exploration assets, they said. The coking coal could be supplied to Bhushan’s steel plant in Orissa; Bhushan also plans a steel plant in West Bengal.
Indian steel companies are increasingly looking at covering their input costs. Coking coal accounts for around half the raw material cost.
Its requirement for the Indian steel industry is around 30 million tonnes a year, against a domestic production of 7.5 mt. More, it has to be blended with imported coal to make it suitable for use.
Bowen would take advantage of upgrading of regional coal transport and shipping infrastructure plans being developed by the Queensland government in Australia. The state government is committed to spend $7.2 billion on new infrastructure projects that will support the Bowen Basin coal industry. A further $3.1 billion is planned on upgrade and expansion, as well as additional rolling stock.
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