NTPC mulling exit from ICVL

With nothing concrete to show for its investment in International Coal Ventures Ltd, state-run NTPC is mulling an exit from the special purpose vehicle, which was formed for acquiring coal properties overseas.

International Coal Ventures Ltd (ICVL) is a joint venture between SAIL, CIL, RINL, NMDC and NTPC that was conceptualised by the Steel Ministry for securing much-needed coking coal and thermal coal assets in overseas territories.

"NTPC has made a presentation to the (Power) Ministry stating that the coal requirement of NTPC and steel companies like SAIL and RINL are different. NTPC needs thermal coal and RINL coking coal, there is a clash of interest," a Power Ministry official said.

The Power Ministry will take a call on the matter in a week's time and Cabinet approval for NTPC's exit will be sought.

The key objective with which ICVL was set up was to secure at least 10% of the coal requirements of SAIL and RINL, that is five million tonne per annum, by acquiring or picking up a stake in overseas mining properties.

ICVL was also expected to meet the requirement of joint venture partners CIL, NTPC and NMDC by using their combined resources, domain knowledge and human capital for procuring high quality thermal coal.

In this regard, it was hoped that ICVL would become an owner of about 500 million tonnes of coking coal reserves by 2019-20. However, the JV has made no breakthrough since its formation.

NTPC requires thermal coal for firing its power plants and SAIL needs coking coal for steel-making. The availability of coking coal is more compared to thermal coal and therefore, more beneficial to steel companies. At the same time, NTPC is also sourcing coal on its own.