Decision number200620020
Application number200610116
Date31 July 2006
Offeror/applicantGujarat NRE Coke Limited
Ultimate applicant beneficial ownership46.93 percent - India, Indian Public
44.76 percent - India, Jagatramka (Arun Kumar)
8.31 percent - Various, Various overseas persons
Beneficial overseas ownership 
- Asset currentN/A
- Asset proposedN/A
- Share current24.78 percent
- Share proposed43.585 percent
Offeree(s)/seller(s)Existing shareholders of Pike River Coal Limited
75.22 percent - New Zealand, New Zealand Public
14.14 percent - Australia, Australian Public
10.64 percent - India, Saurashtra World Holdings Private Limited
Business activitiesMining - Coal
Agriculture - Native Bush
Details of land involved87.5 hectares of freehold situated at North East of Greymouth, West Coast being CT WS8C/825 (Westland Registry).
Regions involvedWest Coast
Total consideration$20,000,000
Consent SoughtTo acquire up to 25 percent of the shares of Pike River Coal Limited.
Rationale

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Gujarat NRE Coke Limited (Gujarat) is one of the largest non-captive manufacturers of low ash metallurgical coke in India. Gujarat is listed on the Mumbai, Kolkata and National Stock Exchanges of India. Gujarat's vision is to become the World's premier commodity company by delivering superior quality products, employing the best technology and most competitive family of workers. Gujarat, having an established presence in Australia, proposes to enter into an Equity Subscription Agreement with NZOG Services Limited to acquire shares in Pike River Coal Limited (Pike River). Gujarat has contracted to purchase 40 percent of Pike River's production for the life of the mine, at market prices to meet its demand for manufacturing coke.

Pike River holds a 40 year coal mining permit (MP 41-453) over 2,401 hectares situated on the West Coast of the South Island. The permit allows the mining of the Pike River premium hard coking coal deposit on the land. Pike River is in the process of developing the Pike River coal mine to achieve first coal production in the quarter commencing September 2007. All consents and access agreements have been obtained by Pike River to develop and mine coal from the Pike River coal mine for export. Once in production, the Pike River coal mine will produce premium hard coking coal, a form of metallurgical coal, which will be exported and used in the production of coke and steel.

Pike River is facing substantial mine development costs to develop the coal mine. These costs will be met by the issue of shares to Gujarat, the issue of shares to Saurashtra World Holdings Private Limited (an existing shareholder in Pike River), an initial public offering (IPO) of shares in New Zealand and Australia and to a number of institutional investors in other countries, and bank financing.

The proposal will provide funds for Pike River to complete the mine development and commence mining and exporting of hard coking coal. The Pike River coal mine project is likely to result in the following benefits:

  1. the creation of new job opportunities in New Zealand;
  2. increased export receipts for New Zealand exporters;
  3. increased productivity in New Zealand;
  4. the introduction into New Zealand of development investment for development purposes.
ContactNick Baker
Russell McVeagh
PO Box 10-214
WELLINGTON