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Lanco willing to divest majority stake in Griffin Coal

Says it is having discussions with two Australia-based merchant bankers for getting a strategic partner

Press Trust of India  |  Hyderabad 

Lanco Group, which owns Griffin Coal Mines in Australia, expects to achieve financial closure for its expansion programme by July 2013 and is also prepared to divest majority stake in the mines, a top official of the infra major said.

Lanco Chairman L Madhusudhan Rao said the total investment that is needed for expansion of Griffin mines would be around $1.2 billion.

This includes increasing mining capacity, strengthening the rail line and building a jetty at port.

"For Griffin coal expansion, we have plans to achieve financial closure by July 2013. We are looking at some sort of a strategic partner also to join. To that extent, we have ten months time," Rao told reporters yesterday on the sidelines of the company’s Annual General Meeting.

"We are not looking at (holding) majority stake. We will look at a shareholders agreement where our position is in control like our Kondapalli power project, where we have 36% stake and shareholder agreement gave us control," Rao added.

Lanco Infratech through ts Australian subsidiary, Lanco Resources Australia, acquired Griffin Coal Mining Company and Carpenter Mine Management for AUD 730 million in March 2011.

He said they are in discussions with two Australia-based merchant bankers for getting a strategic partner.

Explaining the expansion plans Rao said, of the total $1.2 billion investment, 50% will go into mines expansion and the rest will be spent on rail line improvement and port.

"Port upgradation should be about $500 million. $100 million will be for Rail upgradation and balance will be spent on mines side," Rao said.

Last year Griffin produced a little over 3 million tonne of coal. This year, it is expected to produce about 3.7 million tonne of the mineral.

While 3 million tonne is sold in Australia, 7.5 lakh tonnes will be exported.

Replying to query, he said case filed by Perdaman may be have an outcome by May next year.

Australia’s Perdaman Industries, last year, filed an AUD 3.5 billion lawsuit against Lanco in Australia, alleging non compliance with coal supply pact for the company's upcoming urea plant in Western Australia.

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First Published: Fri, September 28 2012. 16:42 IST