Coal India close to buying assets
Coal India is likely to soon firm up acquisition of mining assets in Indonesia as the current economic meltdown coupled with revision of mining rules in that country has thrown up attractive opportunities, report GauravChoudhury & Samiran Saha.business Updated: Feb 08, 2009 22:11 IST
Public sector Coal India (CIL) is likely to soon firm up acquisition of mining assets in Indonesia as the current economic meltdown coupled with revision of mining rules in that country has thrown up attractive opportunities.
Due to the current global economic slowdown, the prices of mining assets abroad have gone down by as much as 60 to 70 percent, making acquisitions attractive, say government representatives. More freedom under government rules is making it easier for CIL.
“Acquisition of mines abroad is under active consideration and CIL after being accorded the Navratna status can go ahead for acquisitions by itself,” Santosh Bagrodia, minister of state for mines, told Hindustan Times.
He said CIL can acquire assets without the government intervention through its foreign arm, Coal Videsh Ltd.
CIL is interested in acquiring three mining blocks with estimated reserves of over 120 million tonnes in Indonesia to enhance the supply of dry fuel for its consumers in India. “CIL is targeting those coal blocks in Indonesia which their government has taken back from the local firms which failed to develop them,” a senior coal ministry official said.
According to the official, given the limited resources and lack of advance technologies, local companies that are given mining rights are generally not able to harness the full potential of the mines and end up looking for joint venture partners from overseas.
Under revised norms in Indonesia, overseas companies may now be allowed individual leases to carry out mining operations. Earlier any foreign miner had to tie up with local firms.
Coal India is also eying a thermal-cum-coking coal block in Mozambique (Southern Africa) for which it would submit bids soon.
Bagrodia and senior officials from CIL also visited the US recently, scouting for metallurgical coalfields.
A special purpose vehicle, International Coal Ventures Ltd, has been floated by five public sector units to identify and acquire overseas coal assets. CIL, part of the consortium, is searching for coalmines in the US, Canada, Australia and Indonesia.