India alters mining law to boost cement mergers

Reuters are reporting that India has approved an amendment to the mining law, allowing the transfer of mines from sellers to buyers in a victory for the State Bank of India (SBI) that had lobbied for the change.

Under pressure to reduce corporate bad debts of more than US$120 billion, lenders including SBI have been trying to reach agreements between distressed cement, steel and power companies and those that are in better shape.

The amendment to the Mines and Mineral Development and Regulation Act, requested by SBI, has now cleared both houses of parliament and should soon become law.

Mines Secretary Balvinder Kumar announced that the changes were mainly aimed at helping companies sell limestone-mining licences along with their cement plants. It could also facilitate a merger of the Indian assets of France's Lafarge and Switzerland's Holcim after a global merger between the two companies last year created Lafargeholcim.

The deal will help UltraTech Cement Ltd's efforts to complete a deal to buy heavily indebted Jaiprakash Associates Ltd's cement plants for 159 billion rupees (US$2.39 billion) along with its limestone mines.

Edited from source by Joseph Green. Source: Reuters

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