Gujarat NRE buys into NZ coal mine

Gujarat NRE is to take $12.6 million stake in New Zealand's Pike River Coal Limited.

Gujarat NRE Coke Limited, India's largest stand-alone, publicly listed coke-making company, is to take a NZ$20 million (about $12.6 million) stake in New Zealand's Pike River Coal Limited, it was announced Tuesday.

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Pike River's parent company, New Zealand Oil & Gas Limited (NZOG), said Gujarat NRE Coke had also contracted to buy 40 percent of Pike's coal production for the life of its mine, near Greymouth, on the west coast of the South Island, at market prices.

The company is the second Indian investor in the mine, which is scheduled to start producing 1.3 million tonnes of coking coal a year in the second half of 2007.

NZOG announced last September that it was joining forces with India's biggest privately owned coke maker Saurashtra Fuels (SFL) to develop the mine and list it on the New Zealand Stock Exchange through a public offering of shares.

SFL will buy at least 150,000 tonnes of coking coal a year from the Pike River mine, which will also export to Taiwan and South America.

Pike River's general manager Gordon Ward said the Indian company's investment was subject to regulatory approvals including the consent of the Overseas Investment Commission.