Surana buys 49% in Indonesian coal mine

Chennai: Chennai-based Surana Industries has picked up 49 per cent in PT Agate Resources Indonesia, which owns coal mining rights in Indonesia. PT Agate Resources is a part of the Agate group of Malaysia which is owned by Dr Sultan Abdul Kadir, a non-resident Indian.

Consideration for the stake has been determined as Rs 40 crore in payment for which Dr Kadir is to be allotted 8 lakh (fresh) shares in Surana Industries – Rs 500 a share. Dr Kadir will then have close to 1.3 per cent stake in Surana Industries.

At a press conference here today, Mr G.R. Surana, Chairman of the Rs 780-crore Surana Industries, and Dr Kadir said because of the arrangement the company would be able to save Rs 1,200 per tonne of coal brought in from Indonesia, compared with the market price. The annual savings works out to Rs 60 crore, Mr Dinesh Surana, Managing Director of the company, said.

The Indonesian coal mine has 50 million tonnes of reserves.

Raichur plant

Surana Industries plans to import annually a million tonnes from Indonesia, half of which would be used to fuel the proposed 35 MW power plant that is being set up at Raichur, where the company is putting up a Rs 473-crore, 0.2 million-tonne integrated steel plant. The rest will be sold to customers in India.

But over time, when the Raichur unit expands to a million tonnes of steel, all the imported coal will be used captively.

Mr Surana said that the first phase of the Raichur plant would go on stream in 2007-08, and will add Rs 300 crore to the turnover of the company. It has been estimated that the plant would result in additional profits of Rs 62 crore in 2008-09.