How top PSUs managed to lose a coal mine Down Under

International Coal Ventures has failed to win its maiden bid for acquiring the Stanwell coalmine in Australia.

The International Coal Ventures Limited ICVL a special purpose vehicle SPV of state-run mineral,metal and power companies has failed to win its maiden bid for acquiring the Stanwell coalmine in Australia. The steel ministry says the SPV would have to rework its acquisition strategies to gain raw material security.

Keen to feed the coal-hungry turbines and furnaces of its promoters,ICVL had put out a binding bid for the Stanwell mine in the Queensland province of Australia. The bid for the mine with reserves of around 200 million tonnes was for around 180 million. ICVL lost it as it was sealed for 220 million, a top steel ministry official told The Indian Express. ICVL formed in May 2009 jointly by Steel Authority of India Limited SAIL,National Thermal Power Corporation NTPC,Coal India Limited CIL,Rashtriya Ispat Nigam Limited RINL and National Mineral Development Corporation NMDC has a capital base of about Rs 10,000 crore and enjoys the powers of a navaratna company.

While SAIL and NTPC are maharatna companies,the rest are navratnas. The SPV was seeking to own about 500 million tonnes of metallurgical coal reserves by 2019-20.

Since ICVL has a huge capital base of Rs 10,000 crore,no acquisition should not have been a problem. We understand that the PSUs were being extra-cautious as it was their maiden bid. But we expect them to be more open and aggressive in their next bid, the official said. The problem was while deciding the bid amount,none of the PSUs was willing to enhance the bid amount owing to their aversion to risk,the official said.

If two maharatna companies and three navratna

PSUs were unable to bid successfully,then it only implies that their acquisition strategy needed to be re-worked, he said.

At the behest of the Prime Ministers Office,the National Manufacturing Competitiveness Council had recently asked the PSUs to intensify their efforts to acquire mineral assets overseas.

However,the PSUs want the government to simplify the existing guidelines. Some of the leading PSUs have reasoned that the key hurdle in acquiring private assets was the selection of technical consultants and merchant bankers.

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The procedures they are asked to follow are too cumbersome,and by the time procedural requirements are completed,the competing countries grab those assets.