Mumbai, India (PressExposure) June 28, 2011 -- To sign agreements with ACC, Adani and Anil Ambani controlled Reliance.
State-promoted mineral major Gujarat Mineral Development Corporation (GMDC) has cleared the decks for limestone supply to some of the cement projects signed during the Vibrant Gujarat Summit. Companies like Anil Ambani Group's Reliance Cementation, ACC and Adani are likely to sign long term supply agreements with GMDC soon, sources close to the development informed.
Highly placed sources in mining outfit informed that GMDC has allocated close to 10 million tonnes of limestone reserves for four cement manufacturing projects.
"We had received expressions of interest (EoIs) from six or seven cement players. Of them we have short-listed around four companies and have also identified limestone from our own reserves. We are now waiting for government approval to enter into longterm supply agreements with these companies," said a GMDC official.
At least three of these companies are major players like ACC, Reliance Cementation and Adani Enterprises. GMDC has allocated 2.5 million tonnes of limestone reserves for each at Kutch.
Anil Ambani group led Reliance Cementation has signed memorandums of understanding (MoU) with the Gujarat government to set up 5 million tonnes per annum (mtpa) plants each at Kutch, Junagadh and Porbandar.
"We have applied for limestone linkage to the Gujarat government. Meanwhile, as getting a mining lease may take up some time, we have also signed anMoU with GMDC for a supply contract of limestone from its mines," confirmed a source in Reliance Cementation.
The investment on the 5 mtpa cement plant would be close to Rs 2,500 crore. Reliance said that it could start work soon after the supply contract is signed and in that case, for setting up a 2.5 mtpa capacity, the initial investment would be around Rs 1200 crore.
GMDC is likely to pick up a 26 per cent equity stake in each of these projects. "The project size of each of the cement plants would be around Rs 1000-1200 crore," informed the GMDC official. GMDC holds the exclusive rights to mine all key minerals including lignite, bauxite, limestone and manganese in the state.
Adani Enterprises, which has signed MoU with the state government for setting up a Rs 1850 crore cement manufacturing unit at Kutch during the 2009 Vibrant Gujarat Summit,however, decline to confirm that there is any immediate plan to set up a cement plant in Gujarat.
"There are no plans to set up a cement plant. We are not considering foraying into cement business at least for now. So far, there has been no official discussion regarding the project at the top level in the company," said a spokesperson of Adani Group.