Deloitte could advise NMDC on Kolmar coal field acquisitions - WSJ
MOSCOW. March 24 (Interfax) - Indian iron ore producer NMDC Ltd is expected to hire Deloitte Touche Tohmatsu India Pvt. Ltd to consult it on the acquisition of three assets owned by coal producer Kolmar, which is controlled by Mikhail Prokhorov's Onexim group via Intergeo, The Wall Street Journal said, quoting sources with knowledge of the deal.
The paper said Deloitte might be hired in a few days time to perform due diligence, which would take a month or two.
A source at Deloitte told the paper that the firm had been short-listed to act as financial consultant.
The paper said, though, that Japanese and Korean companies might outbid NMDC as the assets are of high interest to them due to their favorable geographic location.
Intergeo declined to comment.
Media reports said last year that NMDC might buy several coal fields from Kolmar for $400 million.
Kolmar has told Interfax that it plans to mine 1 million tonnes of coking coal in 2011 at the company's two existing strip mines, Erel and Denisovskaya. The Denisovskaya mine's capacity should be upgraded to 2.5 million-3 million tonnes by the middle of next year, and should start to produce 300,000 tonnes of coal per month for production by Kolmar to double in 2012.
The company plans to start building the Ignalinsky complex in April-May this year, once all issues related to fundraising for the project have been resolved.
Kolmar was established in 2004 to manage coal mining enterprises and develop new projects in southern Yakutia. Lev Kuznetsov was its general director until he was appointed governor of the Krasnoyarsk territory in February 2010. Kolmar aims to rank among Russia's biggest coal companies with reserves of more than 700 million tonnes and output of more than 8 million tonnes of concentrate per year by 2012.
The existing strip mines are run by OJSC Neryungriugol. Plans exist to build a new deep mine an enrichment plant and the Ignalinsky coal complex.
Intergeo acquired a controlling interest in Kolmar in April 2010 and had planned an IPO for Kolmar in 2011.
The state-owned NMDC plans to boost iron ore production capacity 67% to 50 million tonnes by 2015. It has signed a memorandum with Russia's Severstal to form a 50/50 joint venture to build a plant in Karnataka with capacity of between 2 million and 5 million tpa of steel.