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Neyveli Lignite, Gujarat sign MoU

The PSU will establish an integrated lignite mine that will be linked to a 1,500 MW power project in the western state.

india Updated: Aug 17, 2006 21:02 IST

State-owned Neyveli Lignite Corporation Ltd on Thursday said it has entered into a memorandum of understanding (MoU) with the Gujarat government for establishing an integrated lignite mine worth Rs 7,500 crore.

The company would have between 74 and 89 per cent stake in the joint venture company and the balance would be owned by the Gujarat Government or companies nominated by it to implement the above project, Neyveli Lignite informed the Bombay Stock Exchange.

The Union Ministry of Coal has approved the signing of the MoU with the Gujarat government to implement this project, it added.

The project finance would be carried out with debt to equity ratio of 70:30 and the project would be implemented in a period of five years from the day of signing the MoU.

The company would establish an integrated lignite mine of eight million tonnes per annum capacity linked to a power project of 1,000 MW in south Gujarat in the first phase.

The capacity of the power project would be enhanced to 1,500 MW in the second phase with linked mine capacity of 12 million tonnes per annum.

The power generated after commissioning of the project, would be made available-by the joint venture company to Gujarat and other states in the western region as per the allocation.

In addition, the company is presently implementing mine-cum-power projects in Neyveli and Rajasthan to the tune of 750 MW for about Rs 5,560 crore apart from operating units.

The shares of the company closed at Rs 61.90, up 3.17 per cent at the BSE.

First Published: Aug 17, 2006 21:02 IST