The company’s coal mine at New South Wales in Australia

Calcutta, Dec 25: Gujarat NRE Coke Ltd (GNCL), the largest non-captive metallurgical coke manufacturer in the country, is planning to raise $50-$100 million from the international market.

The board will meet on December 29 to weigh the options of raising the funds through ADR, GDR or FCCB.

This is the second time in less than a year that GNCL is raising funds from overseas markets. It issued FCCB worth $55 million in March 2005 to fund a spate of mine acquisitions in Australia.

The proceeds from the second issue will be used to develop a coal mine it acquired during the year.

Gujarat NRE has decided to expedite the mining plan for Avondale Colliery in New South Wales (NSW), Australia to cash in on the booming global coking coal market.

The mine has a reserve of 96 million tonnes of coking coal. The company is expected to pump in $65 million to develop the mine, which is likely to start production in 2007.

“Starting with an initial production capacity of 0.5 million tonnes, it will go up to an annual output of 1-1.5 million tonnes in three years,” Aurn K. Jagatramka, vice-chairman and managing director of GNCL, told The Telegraph.

Coking coal price in the international market is likely to be at $110 a tonne (f..b basis), while GNCL can produce it at $60 a tonne in Australia.

With this kind of margin, the company will get the return on investments in less than two years.

The 29th board meeting will also discuss two other issues ? merger of sister concern FCGL Industries and alteration of the memorandum of association (MoA).

The majority shares of Avondale Colliery is with FCGL. “With the merger, the complete ownership of the mine will come to GNCL. This consolidation will also bring another Australian colliery to GNCL’s kitty,” company president Sumit Khetan said.

The change in the MoA is being affected to expand the company’s business.

The coal mines are also expected to produce significant volumes of thermal coal (high in ash content), which can be used for power generation.

Gujarat NRE is now setting up a power plant using the waste heat recovery system. With the thermal coal in place, it could be using a dual feed plant.