Ruia family-controlled Essar Group yesterday signed a definitive agreement to buy Aries coal mines in Indonesia as part of the company's strategy to acquire global raw material resources to meet the growing needs of its steel and power sectors.

The acquisition will give Essar an estimated resource base of 100 million tonnes of thermal coal and mineable reserves of 64 million tonnes, a statement said.

Although financial details of the transaction have not been disclosed, analysts estimate the value of the deal at around $200 million (Rs908.6 crore).

The Aries coal mines are located in the Kutai region in the Kalimantan province on the eastern part of Borneo Island. The coal deposit contains high-quality bituminous coal with a calorific value of 6,000 and low-ash, low-moisture content, making it suitable for use in power plants.

Mumbai-based Essar Group is a large Indian business corporation with interests in sectors like steel, energy, power, communications, shipping ports and logistics, and construction. Its operations are spread over more than 20 countries across five continents with annual revenue of around $15 billion.

Essar Power is the country's second largest power generation company in the private sector, with a total capacity of 1,220 megawatts (MW).

 The company is currently building six power projects in India, that will expand its power generating capacity to 6,100 MW by 2012.

The Group's director Anshuman Ruia said: ''We are a vertically integrated power producer, with ownership and access to the raw materials needed to run the business. The Indonesia mines are an excellent addition to our growing portfolio of coal assets.''

''This acquisition adds another 100 million tonnes to our existing thermal coal resource base of about 275 million tonnes in India,'' Ruia added. In addition, the mine has 64 million tonnes  of mineable reserves.

The $15-billion Essar expects to close the transaction by April 2010, subject to customary and regulatory approvals. Coal production from the Aries mines is expected to begin within a year.

''This is a major step forward in Essar's strategy of securing long-term fuel linkages and capturing the complete value chain in all its businesses,'' Ruia said.

Earlier this month, Essar Group acquired the US-based Trinity Coal from private equity firm Denham Capital Management for $600 million, securing its access to around 200 million tonnes of metallurgical and thermal coal.

Trinity operates coal mines in the Appalachian region in West Virginia and eastern Kentucky. (See: Essar Global in talks to acquire US coal miner Trinity Coal for $600 million)

Separately, another group company Essar Oil said yesterday that it intends to raise up to $1.7 billion (Rs7723.7 crore) to fund the company's expansion plans, based on a 2007 resolution to raise up to $2 billion through issue of securities in the global markets. The company had already gathered $300 million through issue of global depository shares.