Ennore Coke to begin land acquisition for Dhamara plant soon

Bhubaneshwar, April 23, 2009

Chinese coke exports price reported at USD 400 FOB: The CCCMC released on April 21st 2009, the average reference prices for 12.5% ash content coke export transactions concluded in the previous week as USD 400 to USD 430 per tonne on FOB Chinese port

Ennore Coke Limited, a domestic manufacturer of metallurgical coke, plans to scout for land for its proposed one million tonne per annum (mtpa) coke plant at Dhamara port in Orissa within three to four months.

The company needed 250-300 acres of land at Dhamara to set up a one mtpa coke plant at an investment of about Rs 1,400 crore. The plant was scheduled to be operational by the end of 2010.

“We would start scouting for land for our proposed coke plant at Dhamara port within three to four months. The company intends to acquire land for the project on its own”, said Ganesan Natarajan, president and chief executive officer, Ennore Coke Limited.

On acquiring 90 per cent stake in Broughton Coal mines of Australia, Natarajan said, “We would conduct due diligence for the coal mines within a week. The company expects to close the deal at $10 million.”

Broughton coal mines of Australia are presently valued at about $12 million and they have an estimated reserve of 30 million tonnes of coking coal. Ennore Coke was looking to invest an additional $25-30 million on mining operations of these mines.

Ennore Coke had identified 3-4 coking coal properties in Australia for acquisition. It was also exploring the possibility of picking up stakes in coking coal assets in New Zealand.

Ennore Coke was aiming to pick up stakes in overseas coal mining assets as valuations of these properties were attractive in the aftermath of the economic downturn. Moreover, the company was aiming to achieve raw material security to cater to its expansion plans.

At present, the coking coal requirement of Ennore Coke stands at 7,20,000 tonnes per annum. The company’s coking coal requirement is set to go up significantly in the next couple of years as it is aiming to scale up capacity of its coke plant at Haldia (West Bengal) from the existing 1.5 lakh tonnes per annum to 3 lakh tonnes per annum.

Besides, the company’s proposed coke plant at Dhamara would have a coking coal requirement of 1.3 million tonnes per annum.

To cater to its growing raw material requirement, Ennore Coke aimed to import about four lakh tonnes of coking coal, mainly from Australia in 2009-10 out of which 50 per cent would be semi-soft coking coal and the remaining 50 per cent being premium hard coking coal.

Meanwhile, the company has successfully pushed coke into its batteries in its coke plant located in Haldia last week.

Commenting on the achievement, Natarajan said, “This is a proud moment for us and I would like to take the opportunity for thanking every member of the Ennore Coke family who have toiled ceaselessly to achieve this milestone.”

The successful pushing of coke at the Haldia plant is the first stage of the process of coke making which will culminate with the company attaining its full capacity of producing 130,000 mtpa of coke by the end of May this year. Ennore Coke will also co-generate 12 MW of power, which in turn will generate carbon credits and further add to the company’s bottom-line.

Earlier News:

Ennore Coke, BHP, Anglo Coal in pact soon: Encouraged by the softening prices of coking coal in the international market, Ennore Coke Limited is close to securing its annual long term contract of coking coal beginning April 1 this year with its international suppliers.

As per report the company has targeted to import about 0.4 million tonnes of coking coal, mainly from Australia in 2009-10 out of which 50% would be semi-soft coking coal and the remaining 50% being premium hard coking coal.

Mr Ganesan Natarajan president & CEO Ennore Coke told Business Standard that “Ennore Coke is very close to secure its annual long-term coking coal contract with its international suppliers like BHP Billiton and Anglo Coal of Australia and we expect to clinch the deal within a day or two.

The company would import semi-soft coking coal in the range of USD 115 to USD 120 a tonne and premium hard coking coal at about USD 128 a tonne which is in tune with the prevailing international prices.”At present, the coking coal requirement of Ennore Coke stands at 7,20,000 tonnes per annum.

The company has reserves of about 0.4 million tonnes of low ash coking coal imported from USA and it needs around 30,000 tonnes of coking coal per month to meet its requirement for 2009-10.

Ennore Coke negotiates for lower coking coal prices: In the wake of softening prices of coking coal in the international market, Ennore Coke Limited, a domestic Indian manufacturer of metallurgical coke is negotiating with its global coking coal suppliers like Rio Tinto and BHP Billiton, to secure an annual long term contract of the raw material at USD 140 per tonne to USD 150 per tonne.

Mr Ganesan Natarajan president & CEO of Ennore Coke said that “At present, we are buying coking coal from our overseas suppliers at around USD 160 per tonne and we are negotiating with them to fix the price at USD 140 per tonne to USD 150 per tonne for a long term contract.

We are seeking a lower purchase price for coking coal as spot prices of the raw material in the international market have dipped this year and steel makers are also pressing for lower prices.”Ennore Coke is looking at long term coking coal contracts as its requirement for the raw material which currently stands at about 720,000 tonne per annum is set to go up significantly in the next 2 years.

It would have a coking coal requirement of 1.3 million tonne per annum for its proposed 1 million tonne per annum at Dhamara port in Orissa which is scheduled to be operational by the end of 2010.

It is also scaling up the capacity of its coke plant at Haldia form 1.5 million tonne per annum to 3 million tonne per annum.Ennore Coke’s plans to negotiate coking coal prices comes close on the heels of a similar move by the domestic steel makers whose bottomline was significantly impacted due to higher coking coal prices in 2008.

The average price of coking coal in the international market jumped from USD 96 a tonne in 2007 to around USD 300 in 2008.

Steel makers were now seeking lower prices of coking coal owing to falling steel prices and slump in the demand for raw materials like coking coal in the wake of the prevailing economic recession. Recent sales of coking coal in China were in the range of USD 130 per tonne to USD 150 per tonne.

Australia based Macquarie Group Limited a global provider of banking, financial and advisory services has forecasted a benchmark price of coking coal at USD 110 per tonne for 2009. [From Internet]