Gujarat NRE Coke completes acquisition

Gujarat NRE Coke Ltd has announced that Gujarat NRE Resources NL (Gujarat) the Australian flagship of the Gujarat NRE Coke group, announced on December 21, 2007 that it has completed the acquisition of the Elouera mine (Elouera), from BHP Billiton, which was a part of the Illawarra Coal Business located in New South Wales, Australia. Completion of the sale follows the transfer of the coal lease and associated licenses, and includes the mine, associated land holdings and the responsibility for rehabilitation and closure of the mine once operations are complete. The company announced that the Mine will be re-christened NRE Wongawilli as a recognition of the mine's historical value to the district.

The acquisition of the Elouera Mine will accord the Gujarat NRE group ready infrastructure, including mining equipment and railway access to Port Kembla. According to current plans, Gujarat intends to commence mining from February 2008, with development works commencing for the first of three (3) longwall Blocks with immediate effect. It also stated that it plans, in addition to mining the remaining longwall blocks, develop new headings towards the South and West to access the Avondale lease area which the Company owns. Large reserves of coal exist in the combined Wongawilli and Avondale leases, which will provide more than 20 years of mine life.

This viewed in the backdrop of a global surge in the demand for coal, the acquisition of the mine is expected to reap a windfall for the group. It will be pertinent to note here that the Company is India's largest independent producer of Metallurgical Coke which is currently witnessing a tremendous upswing. As a critical component for steel making, its demand is surging by the day, while the supply side is witnessing a squeeze, following China's move towards licensed and controlled exports. The Elouera Mine will thus go to add to the NRE Group's stated objective of increasing its exports into India with a view towards profiting from this demand supply mismatch and the resultant price hikes.