BackPanel being set up to expedite acquisition plans of Coal Videsh
Panel being set up to expedite acquisition plans of Coal Videsh
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New Delhi: India’s efforts to line up coal supplies to fuel its future needs of energy could soon receive a fillip with the coal ministry proposing the creation of a committee of bureaucrats to sign off on the acquisition plans of Coal Videsh Ltd, a move that will likely speed up a process that currently requires the clearance of the cabinet.
Coal Videsh is a wholly-owned subsidiary of the state-owned Coal India Ltd that aims to acquire coal mines in other countries.
The creation of the committee of secretaries, however, needs to be approved by the cabinet committee of economic affairs and the coal ministry is working on this, said Coal India chairman Partha S. Bhattacharyya.
Coal Videsh plans to buy coal mines in Mozambique and is also looking to acquire mines also in Zimbabwe, Australia, Bangladesh and South Africa. Coal secretary C. Balakrishnan was on leave and could not be reached for comment. A message left for special secretary S.P. Seth in the coal ministry remained unanswered.
Coal Videsh is also in talks with global coal firms such as Peabody Energy Corp. and Anglo-Australian miner Rio Tinto for a strategic alliance to mine coal in Australia, the US, South Africa and Indonesia.
While these alliances will help Coal India get a global footprint, they will also help the overseas firms prepare for the opening up of the Indian coal mining business. Coal Videsh has asked for expressions of interest from foreign firms in this regard; the last date for submission is 17 August.
Questions emailed to Peabody Energy and Rio Tinto on 9 August remained unanswered.
“The ability to quickly close a deal when opportunity knocks at the door will be the key success factor for those looking to acquire mineral assets abroad," said Dipesh Dipu, principal consultant, mining, at audit and consulting firm PricewaterhouseCoopers. He added that the global financial crisis had shown itself capable of knocking out big names from the race for coal assets, thereby presenting Indian firms with an opportunity to acquire these.
Coal India is keen to acquire stakes in overseas coal mines to bridge the gap between demand and supply in the local market, even as coal production in India continues to slow. This will also protect the firm against volatility in international prices of coal. India has 256 billion tonnes of coal reserves, of which around 455 million tonnes (mt) is mined every year. Coal India is targeting a production of 435mt this year, against 403.73mt achieved in 2008-09. India imports around 40mt of coal. Demand is expected to reach about 2 billion tonnes a year by 2031-32, about five times the current rate of extraction.
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