November 21, 2008

India Cements plans investment in coal mines overseas

It is reported that India Cements Limited is heading to acquire coal mines itself after buying ships to ferry coal to its cement plants spread across in South India. The mandate now is to buy mines in Indonesia.

An official of India Cements Limited said that it has sought the services of a coal facilitator in Indonesia to shop for mines there. He added that “We are getting a lot of offers, we are evaluating each and a decision would be taken soon.”

The official said that “We have bought two ships each having a capacity of 40,000 DWT. With these we will save about USD 50 a tonne on cement which cost savings in coal movement.” He added that after this, ICL would have total control over all its raw materials except gypsum.

India Cements Limited consumes some 900,000 tonnes of coal a year. With the prices of coal in the markets touching the roof, India Cements Limited feels that that it could save considerably if it owns coal assets. Coal, which used to be available at USD 40 a tonne 2 years back is now costing USD 120 to USD 130 a tonne, this coupled with delays in coal availability for cement plants is the reason why India Cements Limited is looking for coal assets. Besides, the coal which is being imported can be used to fire its captive power plants as well.