India eyeing coal assets in Australia | business | Hindustan Times
Today in New Delhi, India
Mar 26, 2017-Sunday
New Delhi
  • Humidity
  • Wind

India eyeing coal assets in Australia

business Updated: Jun 07, 2010 14:43 IST

India is looking at buying coal mines in Australia through two state-owned entities in a bid to bridge the domestic coal supply-demand shortfall, a top government official said in Perth on Monday.

NTPC and International Coal Ventures Ltd, which have been scouting for coal blocks in Australia, have come quite close to acquiring the properties, NTPC CMD RS Sharma told reporters.

"ICVL is close to acquiring a mine in Queensland which has estimated reserves of 221 million tonnes. They have appointed merchant bankers, legal advisors and technical experts to do the due diligence," Sharma said after attending the Australia-India Energy and Minerals Forum.

The special purpose vehicle, comprising top PSUs like SAIL, NTPC, Coal India, RINL and NMDC, has not met with any success since its inception in 2008.

However, Sharma said, "It is doing a good job."

He said that the NTPC is also trying to secure thermal coal assets in western Australia. "We are doing due diligence in western Australia on mines with estimated reserves of 350-400 million tonnes," he added.

The maharatna said it will now participate in the bidding process to acquire that asset.

Asked about investments in these two ventures, Sharma said, "For one million tonnes of coal, an investment of $ 100-200 million is required."

NTPC, which has cash reserves of 18,000 crore, has earmarked a capital expenditure of 29,000 crore for the current fiscal.

"We plan to fund the capital expenditure in the debt-equity ratio of 70:30. The debts have already been tied up," he said.

Sharma said that the company, which is scouting for similar thermal coal properties in countries like South Africa and Indonesia, is planning to spend Rs 1.60 lakh crore for the purpose in the next five years.

Power companies started aggressively eyeing coal assets abroad after the government mandated them to import 15 per cent of their coal requirement for a project and blend it with domestic coal. The domestic supply-demand gap currently stands at about 80 million tonnes.

India produced 531 million tonnes of coal in the last fiscal, out of which CIL alone had an output of 431 million tonnes. India imported about 60 million tonnes of coal in 2009-10. The shipments are expected to touch the 100-million tonne mark in the current financial year.