India's coal-based sponge iron manufacturer and power plants operator Monnet Ispat and Energy plans to purchase a majority stake in a 25 million tonne Colombian coal mine.
Coal from the mine is expected to fuel the company's domestic steel and captive power plants.
Monnet mining business chief executive officer NC Jha revealed that the acquisition is likely to be closed within the next two months. "Talks are on for the acquisition of a mine in Colombia that has an annual production capacity of 50,000 tonne per annum," Jha told Business Standard.
The news follows the recent scrapping of Jindal Steel and Power's $2.1bn contract to develop El Mutun iron ore deposit in Bolivia.
Headquartered in the capital city of New Delhi, Monnet Ispat owns sponge iron producing facilities at Chhattisgarh's Raipur and Raigarh.
The company is currently undertaking the construction of an integrated steel plant with a capacity of 1.5 million ton at Raigarh, in addition to a 1,050MW power plant in the state of Orissa.
The Monnet Group will spend about INR7bn ($128m) on the steel plant from a total of INR27bn ($491m) investments planned for 2012-2013.
Monnet further aims to expand its power generation capacity by another 2,000MW before the end of 2014 and plans to invest about INR20bn (nearly $380m) to develop power capacities.