The union cabinet is likely to consider a Special Purpose Vehicle (SPV) proposed by leading public sector utilities in the country to acquire stake in overseas coal mines for meeting the growing production needs.
"The union cabinet is likely to deliberate on the SPV formed by CIL, NTPC, RINL, SAIL and NMDC when it meets tomorrow. The proposed SPV will have an initial capital base of Rs 3,500 crore which will eventually go up to Rs 10,000 crore," a top government official told PTI on Wednesday.
Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL), Coal India Ltd (CIL), NMDC Ltd and NTPC Ltd have joined hands to source coal from abroad, especially Australia and Canada, to increase their output.
SAIL and CIL has decided to pump in Rs 1,000 crore each for the proposed SPV, while NTPC, RINL and NMDC will invest Rs 500 crore each. "Initially the SPV would function as an unincorporated company and after shortlisting coal properties abroad, they would jointly launch a formal company," he said.
The company would be worth Rs 3,500 crore, the official said, adding that "in due course of time the stakeholders would pump in more money to raise its corpus to Rs 10,000 crore." But "for any investment above Rs 3,500 crore they would have to seek the nod of the Empowered Committee of Secretaries to be set up for the purpose," he said. The SPV will have a three-tier decision making body. It will have an apex committee comprising the chiefs of the participating companies besides a steering committee formed of functional directors of these companies.