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INDIA BUSINESS WORLD - September 1st - September 30th - 2008
RNRL SECURES 4 LIMESTONE MINING LICENCES IN MP
RELIANCE Natural Resources, part of the Anil Ambani group, is learnt to have secured four limestone-mining licences in Satna in Madhya Pradesh that will be the key to building its proposed cement capacities.
The combined reserves of the limestone mines — a key raw material for making cement — are adequate to feed a 10-million-tonne cement plant for the next 40 years, a senior company official said, without giving further details. RNRL will spend about Rs 10,000 crore to build about 10 million tonnes of cement capacities by 2013, the official added. The company has applied for limestone mining licences in other states also.
RNRL has been touted as the group’s vehicle for overseeing investments in steel, cement and shipping as these businesses are more in tune with the operations of RNRL.
Limestone and coal are the two major areas for a cement company. India has adequate limestone reserves in states such as Rajasthan, Gujarat and Orissa, apart from Madhya Pradesh. RNRL has also applied for coal linkages. “Since we are also considering a coastal cement plant, we would also look at the option of imported coal,” said the official.
The coal linkages would be significant as RNRL is currently engaged in a court battle with Reliance Industries over issues concerning supply and pricing of RIL gas from the Krishna-Godavari basin. Reliance Power, also part of the ADAG group, has been scouting for coal mines in southeast Asia and in other countries. The company’s subsidiary Reliance Coal Resources has acquired three mines in the South Sumatra area of Indonesia for about Rs 2,400 crore. The group is also scouting for more mines in Australia and South Africa for its power plants.
India is the world’s second-largest cement market after China and most global majors have their presence here, mainly by acquiring existing units. Cement consumption in India is among the fastest in the world at 8% as the country builds houses and develops infrastructure projects such as roads, bridges, ports and airports.
The group has recently announced its intention to build a 12 million tonne steel plant in Jharkhand, which has large iron ore reserves.
The group is building a 4,000 megawatt ultra mega power plant at Sasan and has said that it would use the fly ash generated from the power project, in its cement business.
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