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Gujarat NRE reaches agreement to acquire BHP Billiton's Elouera Mine

Gujarat NRE Coke Ltd has announced that the Company has signed an Agreement with Illawarra Coal Holdings Pty Ltd (Illawarra Coal), a subsidiary of BHP Billiton Ltd., for the acquisition of the Elouera Colliery in NSW, Australia through its Australian subsidiary Gujarat NRE FCGL Pty Ltd.

The mine has large available reserves of premium grade Hard Coking Coal (as referenced in BHP Billiton's 2006 Annual Report). This would be the third coking coal mine to be acquired by the Company after NRE No. 1 Colliery and NRE Avondale Colliery. With this acquisition the Company's short term production of coal is expected to be boosted from 1 million MTPA to around 2 million MTPA.

Highlights of the proposed acquisition are:

– The nine is in operation and capable of producing coking coal on transfer to the Company.

– Availability of Premium grade of Hard Coking Coal reserves

– The mine has substantial infrastructure for coal storage and transportation, which includes a private rail link to port.

– Located in proximity to the two existing coking coal mines, thus giving logistic operational advantage.

– The mine would provide a cheaper and faster option to access the NRE Avondale Colliery.

– Along with the mining lease the Company will also acquire mining equipment and freehold title to land associated with the mining lease.

Commenting on the agreement, the Company's Chairman, Mr. Arun Jagatramka said: “Gujarat is delighted with the acquisition. Apart from providing quality infrastructure and mining equipment for Gujarat's Southern Coalfields production strategy, including a private rail link, it gives the Company additional coking coal reserves.”

“The acquisition also means that Avondale should be able to come into production much sooner than we had anticipated,” Mr Jagatramka said.

The Company is India’s largest non captive manufacturer of met coke with operating coking coal mines in Australia. The Company has recently rolled out plans to set-up two 15MW power plants by using the sensible heat of the flue gas generated from its coke oven batteries at Bhachau, Gujarat and Dharwad, Karnataka.

Source: Equity Bulls

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