Sadbhav Engg to buy 74% in OBCL

Ahmedabad: Sadbhav Engineering Ltd has said it will acquire 74 per cent stake in the Hong Kong-based Ocean Bright Corporation Ltd (OBCL), which holds licences and prospecting rights for iron ore and copper in Mozambique. The acquisition cost was not disclosed.

Sadbhav also said it will have a separate set up for its mining operations. Ocean Bright Corporation has licence or rights for prospecting: iron ore and copper in Tete province; limestone in Nampula province; minerals for coal in Manica province; and has applied for prospecting rights for coal in Niassa province. Initially, the company is expected to invest nearly $25 million in Mozambique. The Sadbhav Group is considering a foray into mineral trading, cement, steel, power and chemicals but a decision is yet to be taken.

Mr Vishnu Patel, Chairman and Managing Director, told reporters here that these concession areas have been selected on the basis of studies conducted by the World Bank in Mozambique. On completion of prospecting, the licenses would be converted into mining licenses , he said.

OBCL, through its subsidiaries, has begun initial prospecting activity with two mining/drilling rigs and plans to acquire eight more in the next six months, Mr Patel said. The Nampula Province area is projected to have reserves of nearly 350 million tonnes of limestone. The consultant, Holtec Consulting, is expected to complete a feasibility study and assessment by September 2008 .Commercial exploitation of limestone reserves is expected to start by April 2009.

Sadbhav Engineering Ltd, whose turnover in 2006-07 was Rs 491 crore is a leading player in India in the contract mining services business and has executed projects involving excavation of overburden, rock, lignite and copper.