CIL may buy 15% stake in Peabody's Australia assets
Coal India Ltd, the world's largest coal producer, may buy up to a 15 per cent stake in US-based Peabody Energy Corp's Australian assets early next fiscal for an estimated $ 100 million (about Rs 450 crore).business Updated: Feb 09, 2011 19:11 IST
Coal India Ltd, the world's largest coal producer, may buy up to a 15 per cent stake in US-based Peabody Energy Corp's Australian assets early next fiscal for an estimated $ 100 million (about Rs 450 crore).
"It (deal) should not take too long a time. It should be two to three months. We are in the final stages of talks with Peabody Energy for a 15 per cent stake for $ 100 million," an official privy to the development, who did not wish to be named, told PTI.
More or less an agreement has been reached on the valuation, the official said, adding, "We will invest in equity and in return, we will get the right for coal offtake."
CIL Chairman P S Bhattacharyya, however, refused to comment on the issue.
The proposal to buy a stake in Peabody's asset will be deliberated at a meeting of a sub-committee of the company board on the state-owned firm's foreign acquisition plans, which is likely to take place this month.
"The proposal is likely to be cleared in the board's sub-committee meeting on foreign acquisitions, which is likely this month," another person in-the-know of the matter said.
Peabody Energy is the world's largest private sector coal company, with sales of 246 million tonnes (MT) in 2010. The company claims to have 9 billion tonnes of reserves and manages and owns interest in 28 mining operations in the US and Australia.
In December last year, Coal India Chairman Partha S Bhattacharyya said the company was in advanced talks to buy a 10 per cent stake in US-based Peabody Energy Corp's asset in Australia.
Coal India had earlier shown optimism that the deal was likely to be finalised this fiscal.
The Navratna company, which has been scouting for coal mines abroad, has earmarked Rs 6,000 crore for this purpose in the current fiscal.
Apart from Peabody, the company is also negotiating with US firm Massey Energy and Indonesian Novem/Sinarma for a possible partnership on their respective mining projects in the US and Indonesia.
CIL mopped up Rs 15,200 crore through its spectacular 10 per cent share sale last year, the country's largest IPO till date.
It accounts for over 80 per cent of domestic coal production, recording an output of 431.5 MT last fiscal. This fiscal, the company has set a target for production of about 460.1 MT of coal.