ET reported that Maharashtra Seamless Limited is in the race to acquire an Indonesia based iron ore mining firm for around INR 300 crore. It is learnt that the Indonesian firm has iron ore reserves of close to 20 million tonne. If the deal goes through, Maharashtra Seamless would also establish a 1 million tonne steel plant close to the iron ore deposits in Indonesia with investments of up to INR 1,200 crore.
Company sources said that it would resort to internal accruals to fund the proposed steel project as well as the acquisition. As part of the backward integration initiatives, it had planned to set up its first steel plant in Orissa. However, if the deal with the mining firm goes through, the plant would instead come up in Indonesia considering the proximity to iron ore reserves.
According to the industry sources, the acquisition of the Indonesian iron ore mining company would help MSL meet iron ore requirements for its proposed steel plant. The steel plant, in turn, would serve as a raw material source for company’s seamless pipes and tubes business.
Maharashtra Seamless plans to add another 150,000 tonne by de bottlenecking the existing capacity of 3.5 million tonnes, located at Raigad in Maharashtra, with an additional investment of close to INR 100 crore. Presently, MSL supplies wide range of pipes and tubes to various domestic industries, primarily oil and gas, for exploration activities. brought to you from steelguru.com