ET reported that Manganese Ore India Limited is considering building a INR 500 crore war chest for buying mining assets abroad, most likely in Indonesia and Turkey.

Mr GP Kundargi director (production & planning) at MOIL said that "We have floated expressions of interest for some smaller deposits in Indonesia and Turkey. However, we are yet to firm up any plans. Our teams have also visited these countries. We may ideally look at an M&A kitty of up to INR 500 crore for possible acquisitions."

The state run company's move comes at a time when domestic steel majors, who also make up for over 90% of its customer base, are in various stages of expanding their steel making capacity. Manganese is used in making steel to increase its strength and durability.

MOIL has also been eyeing opportunities in South Africa, Gabon and Congo to raise its resource base in step with growing demand. Its growth plans are being driven by the estimated rise in demand for manganese in line with rising steel demand at home. With domestic steel demand expected to rise to 120 million tonnes, India's demand for manganese ore is expected to touch 4.5 to 5 million tonnes by 2012-13.

In addition to overseas mines, MOIL is focusing on expanding its domestic mining operations. It plans to double its production to 2.2 million tonnes by 2020 from 1.1 million tonnes.

A company official said that "We are trying to reach deeper levels in existing underground mines to increase output."

MOIL currently operates 10 mines in the country, six in the Nagpur and Bhandara districts of Maharashtra and four in Balaghat district of Madhya Pradesh. MOIL has recently received approval from the Maharashtra government for a prospecting licence on 814 hectares adjoining its mines in Nagpur district.

The official said that "We have earmarked a sum of INR 250 crore for exploration in the area over the next four to five years."

(Sourced from www.economictimes.com)