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Indian firm eyes coke producer's Colombian operation

INDIA-based Aditya Birla Group is reportedly in talks with US miner Drummond for a large stake in...

Donna Schmidt
Indian firm eyes coke producer's Colombian operation

According to the Financial Express, an anonymous source with direct knowledge of the discussions says the deal has a $US1 billion price tag.

Just last year, Japanese trading firm Itochu acquired a 20% stake in Drummond’s South American assets in a $1.52 million deal.

The source told the paper Aditya Birla was seeking between 20% and 40% of Drummond’s production in the Andean nation.

Aditya Birla requires coal for its aluminum producer Hindalco and cement manufacturer UltraTech.

The company was reportedly scouting for thermal coal to feed its captive 750 megawatt power facility, which in turn supplied Hindalco's 359,000 ton aluminum smelter in Mahan, Madhya Pradesh, Financial Express reported.

Drummond’s Mahan block was reportedly suspended by environmental clearances in 2006.

While it was given clearance by the government two years later it idled mining in 2010 following a declaration by the Forest Advisory Committee that the area was a no-go zone because of the mine location being in a heavily forested area.

Aditya Birla was also in discussions to acquire a stake in Indonesia-based PT Bumi Resources.

Privately held Alabama-based Drummond is the largest coke producer in the US.

It has reserves exceeding 2 billion tons across its North and South American portfolios.

It has five Colombian operations at Mina Pribbenow and the El Descanso open pit bituminous operations in the Cesar coal basin near La Loma.

Its US holding is the Shoal Creek underground mine in Alabama.

India holds one-tenth of the world’s coal reserves.

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