MUMBAI Indian conglomerate Essar Group is in talks to buy Trinity Coal from U.S. private equity firm Denham Capital for $550-$600 million, a source familiar with the matter said, as it looks to fuel its steel and power plants.
Essar, controlled by billionaire brothers Shashi and Ravi Ruia, is looking to expand its various business, spanning telecoms and energy to steel and shipping.
"Late-stage negotiations are going on, and a deal could be reached as early as next week," said the source, who did not wish to be named as he was not authorized to speak to the media.
Essar declined to comment. Denham could not immediately be reached for comment.
Trinity Coal operates surface and underground mines in southern West Virginia and eastern Kentucky in the United States.
It sells both steam and metallurgical coal to electric utilities, steel manufacturers, coal brokers and other buyers.
Denham Capital is a global investor with interests in sectors such as power and carbon, natural resources and energy infrastructure, with more than $4.3 billion in invested and committed capital.
It typically targets equity investments between $50 million and $250 million, according to its website.
Essar has a facility, Essar Steel Algoma , in Ontario in Canada, and coal from Trinity is likely to feed this plant, the source said.
The coal could also be used to fuel the group's other steel and power plants in India.
Essar Oil ESRO.BO, a group firm, is in talks with Royal Dutch Shell (RDSa.L) to buy three European refineries.
The company, which runs a 280,000 barrels-per-day refinery in western India and owns a 50 percent stake in a Kenyan refinery, is pursuing the deal as part of plans to have a refining capacity of 1 million barrels a day.
In November, Essar Group agreed to buy a majority stake in Dhabi Group's telecommunication businesses in Uganda and Congo.
Essar is Vodafone's (VOD.L) partner in India's No.3 mobile firm, Vodafone Essar. It holds a 33 percent stake in Vodafone Essar and a stake of less than 10 percent in another Indian telecoms firm, Loop Mobile.
(Editing by Malini Menon and Editing by David Cowell)