Essar Group plans to buy US based Trinity Coal Partners LLC for $550-600m from Denham Capital Management and will use the coal to service its steel plan and iron ore operations in North America.

Metallurgical coal from Trinity will supply Essar’s Algoma steel plant in Canada and planned steel operations in Minnesota, where it has iron ore reserves of 1.4bn tonnes.

The Essar Group conglomerate-having interest in various lines of businesses, is controlled by brothers Shashi and Ravi Ruia. Essar Steel ltd is one of India’s biggest steel producers, with 14m tonnes per annum of capacity.

Transaction Reference: FT

Trinity Coal was put on auction in 2007 'as demand for coal grew amid rising oil and gas prices.' However, nothing seemingly materialized then. Citigroup was advising Denham Capital on the deal.

The company, headquartered at Scott Depot, West Virginia, was formed in 2005 by Jeff Hoops and Denham's predecessor, hedge fund manager Sowood Capital Management LP. Trinity has mines in Kentucky and West Virginia, with reserves of 200m tonnes. Its annual output is about 7m tonnes.

In January 2010, the Essar merged its domestic steel companies — Essar Steel Hazira, Essar Steel Orissa, Hazira Plate and Hazira Pipe Mill under Essar Steel.

Last month the group announced its plans to raise $1bn from overseas markets to fund expansion in steel capacities in domestic and overseas countries.

The group also has a minority stake in Vodafone Essar, and intends to expand in oil and gas with exploration and production blocks in countries like Madagascar, Indonesia and Australia.

Essar’s deal comes as rival Reliance Industries is attempting to buy LyondellBassell, the global chemicals group, at an enterprise value of $14.5bn. Although, the deal may be called off as LyondellBassell has reached a settlement agreement with his unsecured credits to convert part of its debt into equity. RIL is also talking to Canada based – Value Creation Inc. for a possible acquisition

Essar's telecom rival Bharti Airtel is planning to acquire Zain of Kuwait for $10.7bn.