CIL, Shipping Corp in JV talks for coal imports

CIL, Shipping Corp in JV talks for coal imports

New Delhi: Shipping Corporation of India (SCI), the largest domestic shipping liner, may form a joint venture with Coal India Ltd (CIL) for coal imports, a top company official said.

“We are interested in having a JV with Coal India... The matter is under discussion, we have exchanged some notes," Shipping Corporation of India chairman and managing director S Hajra told PTI.

Talking about the equity structure of the proposed JV, Hajra said, “Most likely it will be like the SAIL model, where we have got a 50:50 JV."

SCI recently reached a joint venture agreement with the country’s largest steel-maker, SAIL, for the import of coking coal and is holding discussions with ONGC for offshore activities.

The JV, which is expected to be formed by the end of this fiscal, would ensure supply logistics and delivery of imported coal from the source of import to consumers, a senior official of Coal India said on the condition of anonymity.

The joint venture is likely to be managed by the Shipping Corporation, as it has the domain expertise in the field and will also be allowed to make the most of the increasing opportunity to ship imported coal to India, the official added.

In addition, the official said the proposed JV may also be allowed to look for more business opportunities in the area of coal supply logistics and could also own its vessels, once a critical volume is achieved.

Coal India, whose initial public offer (IPO) will hit the capital markets on 18 October this year, plans to import 6 million thermal tonnes of coals in 2010-11, based on firm orders placed by companies like NTPC.

While the world’s largest coal producer has a presence in Mozambique, it is learnt to have short listed US-based Peabody Energy and 11 others as possible partners for sourcing coal to meet growing domestic demand.