India?s Maharashtra Seamless to acquire Indonesian iron ore mining firm

Indian firm Maharashtra Seamless (MSL), the flagship company of the Rs 3,000-crore DP Jindal Group, is in the race to acquire an Indonesia-based iron ore mining firm for around Rs 300 crore, the Economic Times reported

It is learnt that the Indonesian firm has iron ore reserves of close to 20 million tons. If the deal goes through, MSL would also establish a 1 million-tonne steel plant close to the iron ore deposits in Indonesia with investments of up to Rs 1,200 crore.

Sources say MSL would resort to internal accruals to fund the proposed steel project as well as the acquisition. When contacted by ET, the company?s spokesperson declined to comment. As part of the backward integration initiatives, the company had planned to set up its first steel plant in Orissa. However, if the deal with the mining firm goes through, the plant would instead come up in Indonesia considering the proximity to iron ore reserves, said sources.

According to the industry sources, the acquisition of the Indonesian iron ore mining company would help MSL meet iron ore requirements for its proposed steel plant. The steel plant, in turn, would serve as a raw material source for the company?s seamless pipes and tubes business. (*)