July 24, 2008

SPS Steel may buy stakes in PT Kartika Selabhumi

ET reported that Kolkata based SPS Steel & Power is close to buying a strategic interest in Indonesian coking coal mine PT Kartika Selabhumi. As per report, SPS would pick up a 40% stake in the firm, which is also said to have 10 million tonnes to 12 million tonnes of thermal coal reserves.

Mr Bipin Kumar Vohra vice CMD of SPS Steel & Power said that "We will explore the Indonesian mine to determine the exact extent of coal reserve after which we would be able to arrive at a final valuation for the deal."

Mr Nirmalya Mukherjee of industry journal Steel & Metallurgy said that though the exact valuation of the Indonesian mining firm could not be ascertained, it is estimated to have reserves of about 6 million tonnes.

He added that Jai Balaji Industries, Adhunik Steel, Visa Steel and Vizag Steel, are also scouting for captive raw material sources in Australia, South Africa and South East Asia.

SPS has estimated that it would require about INR 1,000 crore to meet its expansion plans. It has already tied up 50% of the amount through debt and is making a private placement to raise the balance.