Indu Group lines up Rs 2000cr for mining business

Hyderabad-based Indu Group, with interests in infrastructure and realty, is gearing up to offer bundled services in coal mining. The company will spend about Rs 2,000 crore in phases for the mining business.

The group has formed a special purpose vehicle – Indu Mineral Exploration Limited – for mining coal and minerals. The mining vertical will handle resource mapping, mining plan, excavation and material handling.

Speaking to Business Standard, B Ravi Krishna, head - allied business and mergers and acquisitions, said mining was only an extension of its earth excavation works for its infrastructure and other projects. With most of the equipment already in place, the group felt it was the right time to enter contract mining.

The company expects to begin its operations around March 2009. “We will bid for some mines in Jharkhand and other places,” he said. It is targeting a revenue of Rs 150 crore from this vertical in the first year (2009 fiscal) and Rs 350 crore by 2011. It also aims to achieve 10 million tonne per annum in about three years. “Mining will be a steady revenue model as the product cycles are long (about 20 to 15 years),” he said.

Initially, the focus will be on overburden – the material that is removed from the earth’s surface to uncover the coal. The group has set up a 5-million cubic metre per month earth excavation capacity, he said.

The company is also in talks with a US-based Indian subsidiary washery to supply washed coal. The formalities are expected to be completed in a month. Besides, it is negotiating with three other companies for material handling and making conveyor belts.

The company is expected to sign a memorandum of understanding with a European underground mining company this month, Krishna said. As far as open cast mining is concerned, the group will go alone as it has the technology and equipment.

Krishna said the group would also bid for the coal block allotted to APGenco. The Centre had recently allotted four coal blocks to APGenco of which one is open for bidding.