Kolkata: South Africa’s Sasol Ltd has expressed its willingness to acquire a minority stake in a joint venture (JV) with Indian state-owned miners Coal India Ltd (CIL) and NMDC Ltd to produce liquid fuel from coal, a little over a year after it formed a 50:50 venture with Tata Steel Ltd for a similar project.
Sasol is pursuing global opportunities to commercialize its coal-to-liquids technology through its arm, Sasol Synfuels International (Pty) Ltd. The company’s readiness for a second joint venture was conveyed during coal minister Sriprakash Jaiswal’s recent visit to South Africa, according to Partha S. Bhattacharyya, CIL’s chairman.
The Union government has already awarded a coal block near Talcher in Orissa to the Sasol-Tata Steel venture that was formed in early 2010. It is expected to be operational by 2018 and could produce 80,000 barrels of liquid fuel a day, Sasol’s India head Mark Schnell had said soon after the unit had been set up.
The joint venture projected an investment of around $10 billion (Rs 45,600 crore) on the project.
It seems there isn’t any restrictive covenant in its agreement with Tata Steel, and so Sasol is free to invest in another venture for a similar project, according to Bhattacharyya.
“Their people from the Indian operations were present at the meeting (in South Africa),” he said. “Shouldn’t they have mentioned it if there were any restrictions at all on its entering another JV?”
Sasol’s spokesperson in South Africa refused to offer any comment immediately.
NMDC and CIL are to hold equal stakes in the venture, which would develop the Deora-Pachami coal block in West Bengal’s Birbhum district. Though the block is estimated to have huge reserves of around 19 billion tonnes, it has a “120m rock overburden” and has not been exploited as yet, according to Bhattacharyya.
“The proposal to derive liquid fuels from the Deora-Pachami block went to the coal ministry from CIL,” said a company official, who did not want to be identified. “We wish to partner NMDC because we do not have the technology to remove such a huge overburden.”
NMDC chairman Rana Som wasn’t immediately available for comment.
Tata Steel declined to comment on Sasol’s plan to form a second joint venture.
West Bengal Mineral Development and Trading Corp. Ltd is also keen to invest in the joint venture, according to a state government official who did not want to be named.
“It, too, could be given a small stake in the venture,” Bhattacharyya said.