Indian state-controlled mineral producer NMDC has dropped its bid to acquire the Tacoa coal mine in the US.
It had earlier planned to make an offer of $90.74m for the coal mine, but the company cited the nation's high accident rates and adverse geological conditions at the mine as the reasons for the withdrawal. NMDC's board was also apprehensive as the firm has no expertise in mining coal.
The company has also dropped its bid for the Vince coal project in Russia and the Greystone iron ore mine in Brazil.
However, the company intends to acquire two coking coal mines in Mozambique and Russia for about $300m. The acquisitions aim to supply NMDC's 3Mt steel plant in central India and a similar-sized plant it co-owns with OAO Severstal of Russia in southern India.
Bloomberg News quotes NMDC chairman Narendra Kumar Nanda saying that the company intends to purchase a 360Mt deposit mine in Mozambique's Tete province and an 80Mt mine in Kemorovo region in Russia. "We want to be prepared when our steel mills start operating; we can bring some coal from these mines to our plants and sell the rest for hedging purposes," Nanda said.
NMDC has about Rs210bn ($4bn) of cash on hand to fund the acquisition, the company said. The company intends to appoint advisers by the end of this month to carry out the due diligence for the assets.
Many Indian steelmakers have been seeking to acquire overseas coal mines to address domestic supply shortage.