Indian miner stokes up on coal holdingThe AgeJamie Freed, Sydney...

Indian miner stokes up on coal holding

The Age
Jamie Freed, Sydney


INDIA has boosted its presence in the Australian coal industry.

The locally listed arm of Gujarat NRE Coke has agreed to buy BHP Billiton's shuttered Elouera coking coalmine in NSW for $49 million.

Gujarat NRE Resources owns the neighbouring Avondale colliery, which is also closed. It plans to reopen both in the next year to produce 1 million tonnes of coking coal a year and then increase output to at least 2 million tonnes.

Gujarat NRE Coke, India's largest coke producer, owns the operating NRE No. 1 colliery in the NSW Illawarra region.

The Elouera purchase was completed through its Australian-listed arm, which has a high-profile board including former NSW premier Neville Wran and former Sydney stockbroker Albert Wong.

The Indian parent company owns about 83 per cent of Gujarat NRE Resources and will help finance the acquisition, although details have not been finalised.

Gujarat NRE Coke is not the only Indian company eyeing Australian coal assets. India's Tata Group has said it is examining acquisitions in Australia. And an investment banking source confirmed it had recently been reviewing coal assets.

Earlier this month, India's Hindustan Times said Tata was believed to be in talks with Rio Tinto and two other local miners about acquiring majority stakes in mines in NSW and Queensland.

Gujarat NRE Resources' head of mining operations, Chris Harvey, said BHP approached his company about the possible purchase of Elouera and they had been in talks for about five months.

Gujarat NRE Resources chairman Arun Kumar Jagatramka said the Australian-listed arm bought the mine rather than the Indian parent company because the mine was close to the Avondale project.

"Because we own the adjacent lease, we saw the infrastructure could be used to give us much easier access," he said. "It became a natural fit for us."

BHP ceased mining at Elouera in 2005 and turned over the operations to a contractor, which closed the mine in March.

BHP said its Illawarra coal production levels would not be affected by the sale of Elouera.

Gujarat NRE Resources shares closed 4¢ higher at a record 35¢ yesterday.