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South African coal mining project rejects bid by TATA Power

Steel News - Published on Mon, 09 Apr 2012

PTI reported that exploration company Firestone Energy has rejected a bid by TATA Power for a 30% stake in a coal project in South Africa, citing a huge undervaluation of the project.

The report by South African daily Business Day said that TATA had offered ZAR 480 million for the stake in the Limpopo venture, which is a partnership between Firestone Energy and South Africa based Sekoko Resources.

Sekoko Chairman Mr Tim Tebeilatold the daily said that TATA had based its bid on a valuation of ZAR 1 billion while the true value of the asset was ZAR 1.6 billion.

Mr Tebeila said that \"I was expecting [Tata Power] to come up with a good value, but it\'s not a major setback because we have a good asset.”

Work on the mine is expected to start in 2012 with a production output of two million tonne of coal annually, with a gradual increase to 10 million tonne within five years.

In a release Firestone Energy said that \"Following consideration of the offer, the board of Firestone has decided to reject the (Tata Power) offer ... Materially undervalues the value built up in the project to-date.\"

The company had received an offer from TATA Power Company Limited to invest in its joint venture with Sekoko Resources to develop a coal mine in the Waterberg area of South Africa.

Source - PTI

(www.steelguru.com)
Posted By : admin on Mon, 09 Apr 2012
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