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Coal India plans to buy mines overseas to meet demand

Coal India plans to buy mines overseas to meet demand
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First Published: Thu, Apr 05 2007. 11 19 AM IST
Updated: Thu, Apr 05 2007. 11 19 AM IST
By Pratik Parija and Debarati Roy
Coal India Ltd., a government-owned monopoly, plans to buy mines in Canada, Indonesia and Australia as domestic supplies of the fuel lags behind demand from power generators and steelmakers.
The company, that controls most of the nation’s coal supply, may boost production 6.8% to 384.5 million tonnes this year ending March, Chairman P.S. Bhattacharyya said today. Output has averaged 325 million tons since 2002, less than the 460 million tonnes the country burns every year.
India’s economy, Asia’s fourth-biggest, has grown 8% annually in the past three years, boosting demand for coal from steelmakers to make cars and appliances, and to feed generators. Tata Power Co., the nation’s second-biggest utility by sales, agreed on 31March to pay $1.3 billion for a 30% stake in two coal mining units in Indonesia.
India likely imported 46.62 million tonnes of the fuel in the year ended 31 March, up 12% from a year ago, according to the estimates given by the ministry of mines. The nation, one of the world’s five biggest buyers of the fuel, uses coal to fuel half its 128,000-megawatt generation capacity.
Separately, Bhattacharyya said he would recommend to the government that it agrees to sell a 5 percent stake in the company to the public, potentially raising Rs30 billion, echoing comments from his predecessor and a newspaper report.
Coal India planned to sell a 5% stake, then-Chairman Shashi Kumar said in February 2006. Business Line also reported last June that the government planned to sell 5% of Coal India to raise Rs35 billion, without citing anyone.
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First Published: Thu, Apr 05 2007. 11 19 AM IST
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