India?s NMDC to acquire Renuka?s coal mine in Jambi

India?s state-owned mineral producer NMDC Ltd is planning to acquire a coal concession in Jambi, owned by IDX-listed coal miner PT Renuka Coalindo Tbk, a local subsidiary of India?s Shree Renuka Group.

Reports in India said on Saturday that NMDC is currently on the verge of completing a due diligence process of the thermal-coal mine. The planned acquisition forms part of a diversification strategy and to take advantage of the current cheaper valuation of coal assets amid the lingering downturn in the global coal market.

?Due diligence on the asset owned by Indonesian stock exchange-listed PT Renuka Coalindo Tbk is almost finished and the report is likely to come by the end of the current month,? a senior NMDC official was quoted as saying.

After evaluating the report, officials of the state-owned company will visit the mine in Jambi province. Based on their feedback, a decision on the acquisition will be taken, the official said.

Shree Renuka Energy, part of the Shree Renuka group, owns the mine through its listed subsidiary PT Renuka CoalindoTbk.

Spread across 1,000 hectares, the region has coal reserves of about 100 million tons. As of March 2013, the company had produced 322,583 tons, lower than the 485,920 tons produced a year ago due to the current market downturn. (*)