Big push to acquire mineral wealth abroad
The government is planning a major overseas shopping drive to ensure secured supply of scarce resources such as crude oil, gas and coal, report Anupama Airy and Gaurav Choudhury.india Updated: Feb 12, 2010 00:59 IST
The government is planning a major overseas shopping drive to ensure secured supply of scarce resources such as crude oil, gas and coal.
India is realising countries such as China have made a headstart in the sweepstakes to control the world’s scarce natural resources market.
The government is putting together a comprehensive policy framework that includes setting up of a dedicated fund and specialised cell to help state-owned companies acquire these strategic resources.
The Prime Minister’s Office, in a meeting last week, decided it is the right time to aggressively acquire raw material resources. “The PMO has asked the Finance Ministry and the Planning Commission to work out the size and structure of the dedicated fund in 30 days,” a senior government official told HT, requesting anonymity.
China is using its $200 billion (Rs 9,20,000 crore) sovereign wealth fund to acquire raw materials abroad. “This (China’s resource drive) is not only to meet its domestic requirement but for controlling the natural resources of the world in the long term,” the official said.
In the last 18 months, China has invested $106 billion (Rs 4,87,000 crore) in acquiring overseas oil and gas fields. In the same period, India has spent $2.5 billion (Rs 11,500 crore).
State-owned companies such as Coal India Ltd, NTPC and Steel Authority of India Ltd are eyeing purchases of coal and metal mines in Australia, Africa, Indonesia, the US and Chile.
But these companies are disadvantaged by cumbersome procedures. To counter this, a centralised nodal cell will be set up empowered with strategic and decision making powers.
Action has begun on the economic diplomacy front as well. The External Affairs Ministry has been asked to work out a strategy for acquisition of such resources, particularly in Africa where these assets are in direct government control.
ONGC Videsh Ltd has so far invested $12.5 billion (Rs 55, 200 crore) in buying oil and gas fields in Russia, Vietnam, Syria, Colombia, Sudan and Venezuela.