State-run mining company NMDC has dropped the takeover bid for Tacoa coal mine in the US owing to the high accident rates and adverse geological conditions there. This development comes soon after the company dropped its bid for the Vince coal project in Russia and the Greystone iron ore mine in Brazil.
The NMDC board,after extensive deliberations on December 2,shot down the proposal to acquire the Tacoa mine for $90.74 million.
The directors observed that legal consultants hired for due diligence have advised against the acquisition bid as the mine has definite legal issues.
In addition,the reserves do not meet the guidelines of the concerned US agencies and have not been estimated through scientific mining methodologies. The board also expressed the apprehension that NMDC is a known iron ore mining firm and has no expertise in mining coal.
As per the diligence reports,several companies have previously mined coal from Tacoas leased property and the adjacent one. However,it was observed that each company experienced financial loss as a result of encountering adverse geological consitions,as Tacoa has,and ceased their operations, the Board observed.
In view of the adverse mining conditions and high accident rates,the board expressed its objections to the takeover bid.