CIL may seal Rs 7,700 cr in overseas deals in May

Coal India said it expects to seal deals worth about Rs 7,700 crore with foreign firms this month for mining coal abroad.

State-owned Coal India said it expects to seal deals worth USD 1.7 billion (about Rs 7,700 crore) with foreign firms this month for mining coal abroad.

“We are likely to finalise USD 1.7 billion foreign partnership pacts this month for mining about 280 million tonnes of coal over a period of 10 years,” Coal India Chairman Partha S Bhattacharyya told reporters here on the sidelines of a conference on “Challenges in Coal Sector,” organised by Standing Conference of Public Enterprises (SCOPE).

“Due diligence is being done on five proposals from three global companies for partnerships in Australia,Indonesia and the US,” Bhattacharyya said.

The company has already appointed three consultants — DSP Merrill Lynch,Royal Bank of Canada and Royal Bank of Scotland — for fast-tracking the proposed ventures. The world’s largest coal producer,which meets nearly 82 per cent of the country’s requirement of the dry fuel,has already named US-based Peabody as a possible ally for such ventures.

At present,the company is looking to forge equity and joint venture agreements with the concerned companies,but it may consider entering into offtake pacts later.

In the current fiscal,CIL has earmarked 60 per cent out of its total capital outlay of about Rs 10,000 crore for such global deals.

As part of efforts to expand its global footprint,the coal monolith had floated global bids in July last year inviting players to partner with it for joint ventures in coal mining abroad,which saw firms like Rio Tinto and Peabody evincing interest.

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Last year,it acquired two blocks in Mozambique spread over a 205 sq km area with estimated reserves of 1 billion tonnes of coal.

Addressing the conference,Bhattacharyya said the Navratna company plans to commission 20 washeries with a capacity to wash 111 million tonnes of fuel.

Speaking at the event,Coal Secretary C Balakrishnan said coal fields needed to be mapped on the basis of forest and natural environment maps to demarcate ‘go and ‘no go areas,so that the areas which do not overlap can be mined in future with modern technology to meet energy requirements.

SCOPE Chairman Arup Roy Choudhury said coal is a vital resource,as it constitutes 53 per cent of the country’s energy mix and more than 70 per cent of power generation is coal based. He stressed on the need for modernisation of coal mines. SCOPE Director General U D Choubey said there is a need to address issues related to infrastructure and logistics.