Sales from Zambia mine to begin from Q1FY13: Nava Bharat

[bingogo]

Sales from Zambia mine to begin from Q1FY13: Nava Bharat

Published on Mon, Dec 12, 2011 at 16:29 | Source : CNBC-TV18

Nava Bharat Ventures , which acquired Zambia's largest coal mine two years ago, now plans to expand its international business. Speaking about the same, PJV Sarma, director at Nava Bharat Ventures tells CNBC-TV18, "The international operations in Zambia consist of two portions; one is revamping the already existing coal mine and setting up a power plant."

The company has also installed coal handling and processing plant which is expected to be functional by March- April, 2012.

"From Q1 of 2012-13 maybe from March or April onwards our new coal handling processing plant will be producing the high grade quality coal. We will be selling that as high grade coal and that is about 6,000-6,500 kilocalorie high value coal within Zambia," he added.

Below is the edited transcript of Sarma’s interview with CNBC-TV18. Also watch the accompanying video.

Q: We understand that going forward you are going to have greater emphasis on your international operations. Take us through what sort of plans you have there and why the focus on the international business?

A: As we have been saying in our quarterly conference calls also, we are relying quite a bit on our international operations, which is going to be quite substantial compared to the Indian operations now. We acquired the largest coal mine in Zambia somewhere in April 2010 and the operations, which are in full swing, consist of two portions; one is revamping up the coal mine, which is already existing, and also setting up the power plant.

As far recommencing the mining operations is concerned, it consists of two grades of coals; the high grade coal which is coming from the lower stream and the low grade thermal coal from the upper stream. What we are doing right now is revamping the coaling operation by bringing on new coal handling and processing plant which is under assembly in South Africa. Based on the progress made so far, maybe by March we will be commencing sale of high grade coal which is a significant milestone in the operations of our Zambian subsidiary.

So probably from Q1 of 2012-13, March or April onwards, our new coal handling processing plant will be producing the high grade quality coal which we will be selling as high grade coal which is about 6,000-6,500 kilocalorie high value coal within Zambia. That is a significant addition to both our bottomline and topline of the consolidated operations now.

As far as power plant is concerned, as you are aware we are putting up the power plant in two phases; the first phase consist of 300 megawatt power plant, where we have made significant progress in terms of concluding the main project documents like power purchase agreement with Zambia electricity supply company and quite a few other documents

So now the way things are moving, by January we will be announcing zero debt for our power plant, which is a significant milestone. So that is 33-36 months schedule for the power plant which will start from January 2012. So both the coal mining operations and power plant will be very much on schedule.

Q: With this focus on the international business, how is the fluctuation in the rupee impacting you?

A: No, its not. If you look at it the inflows for our subsidiary in Zambia, it is going to be dollar based; the power purchase agreement has been signed in dollars, so the revenues in Zambia for power is going to be in dollars. So we are not affected by the fluctuation. We currently hold 65% stake in the company with 35% stake with the Government of Zambia.