Ahmedabad-based Electrotherm India Ltd., has signed a joint venture agreement with Aditya Birla Group's Grasim Industries Ltd. for a coal extraction.
The Ministry of Coal had allotted a coal mine in the Bhaskarpara Block, Chattisgarh to both the companies nearly a month ago following which a JV was formed on Wednesday.
Under the JV, Electrotherm India would be holding 52 per cent share while the rest would be held by Grasim.
While a name for the JV company is yet to formalised, Navin Nakra, director at Electrotherm India said that it could be named as Bhaskarpara Coal Company. Over a period of three years, the JV partners will invest around Rs 300 crore for coal extraction from the mine, said Nakra.
“The coal mine, with a deposit of over 45 million tonnes, is expected to generate revenues worth Rs 900 crore per annum at current market prices,” he added. Both Grasim and Electrotherm will be utilising the coal for captive consumption.
“While Grasim would use it for cement production, we will be utilising it for steel production as well as power generation,” said Nakra.
Having bagged a coal mine, Electrotherm is on its way of expansion. The company would be investing another Rs 400 crore for expanding its captive power plant from 30 MW to 60 MW, apart from raising steel plant capacity from half a million to around one million.
The steel division of Electrotherm India manufactures duct iron pipes, stainless steel, sponge iron and other various steel items. Last year the company pegged a turnover of Rs 1,300 crore.
In fiscal 2008-09, Electrotherm aims to register a revenue of Rs 2,300 crore of which the steel division will generate around Rs 1,800 crore, Nakra added.