Calcutta, Jan. 11: Electrosteel Casting Ltd will raise $75 million through foreign currency convertible bonds (FCCB).

The leading ductile iron pipe manufacturer will use the proceeds to develop a coal mine in Jharkhand and set up a sinter plant at Khardah, Calcutta.

The projects will together cost Rs 400 crore. While Rs 330 crore will come from the issue, the rest will be generated through internal accrual.

The board has ratified the FCCB issue today. The resolution will be placed before the shareholders on February 20.

This is the second time in less than a year that the company is scouting for overseas funds.

The $45-million global depository receipts (GDR) were issued in September to expand the mini blast furnace and ductile iron pipe facility and pay debt.

The company will invest Rs 330 crore to develop the coal mine, for which it will get the lease in two months.

“We will start development work in six months from now,” an Electrosteel executive said.

The block at Parbatpur, Jharia will generate 5 lakh tonnes of coal annually after it is fully developed. The company has set up a coke oven plant and a waste heat recovery power plant at Haldia.

At present, it imports the coking coal required there. After the mine is developed, the captive coal will be used instead of imports, resulting in substantial savings for the company.

A rough calculation shows that the company stands to save around $60 a tonne by using captive coal.

Electrosteel also proposes to set up a coal washery unit there to reduce the ash content from the Jharkhand mine.

In Khardah, where the company’s ductile iron pipe factory is located, the sinter plant with a capacity of 850 tonnes per day will be set up for increasing the liquid metal availability from blast furnace. There will be an investment of Rs 66 crore.

Recently, it set up a ductile iron fittings plant at a cost of Rs 50 crore. The plant will provide complete corrosion protection to DI fittings.

The investment is made to make its product more competitive in the export market, especially in the European, Gulf, Southeast Asian and African countries.