Delay in India Cements' mining activities in Indonesia

Delay in India Cements' mining activities in Indonesia

India Cements, which had initially planned to start mining from its Indonesian coal mine by May 2010 is still awaiting environmental clearances from the government there. The company had announced the acquisition of the Indonesian mine in October 2009 and has since then extended the target to commence operations to March 2011. It expects to import monthly 350,000-4 lakh tonne to be utilised for cement which would be blended with higher grade coal, and 4 lakh tonne for its captive power plant. India Cements had acquired the mine for Rs 100 crore, of which only Rs 50 crore has been paid as of now. In the third quarter of the current fiscal, the company imported coal at $116 per tonne. The company is expecting the sales to increase to 90,000 tonne by the end of this month. The company has a debt of Rs 2,490 crore, including the foreign currency convertible bonds (FCCBs). The company has already lined up substantial portion of the repayment. It had raised money through issuance of FCCBs of $75 million at Rs 350 per share which has to be repaid by May.

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