Sunday, January 24, 2010

India's Mercator eyes more Indonesian mines

India’s second-largest private shipping company, Mercator Lines, is looking at acquiring more coal mines in Indonesia as part of its strategy to hedge against the cyclical nature of the shipping business. The HK Mittal-controlled company has earmarked up to $100 million capex for its coal business and is targeting production of 8 to 10 Mt/y from Indonesia over the next five years. “The company is in talks with the Indonesian government and some private players for acquiring the coal mines,” a top level company source told the Economic Times.

Mercator acquired a coal block in Mozambique in 2008 and three coal mines in Indonesia last year and is aggressively searching for more in view of the huge demand from India and other countries. The company is currently producing more than 2 Mt/y of coal from the three Indonesian mines, which have a deposit of 21 Mt. Now, Mercator has become the biggest exporter of coal from Indonesia to India through its subsidiary Oorja.

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