Undeterred by a recent setback in Bolivia, Jindal Steel and Power Ltd (JSPL) announced the acquisition of Canada’s CIC Energy Corp for Rs 650 crore ($115 million) on Wednesday.

This will give JSPL access to CIC’s estimated six billion tonnes of thermal coal assets in Botswana. JSPL already owns mines in Mozambique, Indonesia, and Australia.

JSPL said that it will spend $100 million to open up the mine in the next two-three years. Initially, the coal would be used to fire a 300 MW power station planned at the same location with an investment of around $600 million.

“Both the exercises (exploiting the mine and setting up of the power plant) would cost JSPL nearly $700 million over the next three years,” JSPL Director and Group CFO Sushil Maroo said in a conference call.

Maroo later told Business Line that JSPL would raise funds from international market to fund the project. Currently, JSPL has no plans to bring the coal from Botswana to India. At the same time, it has evinced interest in building a 1,200 MWplant in Botswana for supplying power to South Africa.

“The region is well connected by the grid. South Africa is just 30 km from the project. Botswana has no specific control on end use of coal and there are no restrictions on exports. And electricity tariffs are good,” said Rajesh Bhatia, President (Finance) of JSPL.

JSPL did not disclose any outlook on coal production from Botswana. It said that CIC Energy would be de-listed from Canada’s stock exchanges within a week. However, investors in India gave thumbs down to the JSPL’s latest buyout. The JSPL scrip shed Rs 16.85 or 4.78 per cent to close at Rs 336 on the BSE on Wednesday.

In July, JSPL terminated a $2.1 billion mining and steel venture in Bolivia on fuel supply woes and had blamed the local government for its investor unfriendly attitude.

> vishwanath.kulkarni@thehindu.co.in

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