Over 100 global mining companies from countries like Australia, US, Indonesia and South Africa have evinced interest in entering into a strategic partnership with the state-run Coal India Ltd (CIL), the world’s single largest coal miner.
CIL had invited Expression of Interest (EoI) from global mining companies in July this year for selection of strategic business partners in Australia, US, Indonesia and South Africa for undertaking joint business initiatives in coal mining.
The deadline for these overseas mining firms for responding to CIL’s EoI notice is August 31 this year.
“The response to our EoI notice for a strategic business partnership with global mining firms has been overwhelming. More than 100 mining firms have evinced interest in this proposed partnership,” CIL Chairman Partha S Bhattacharyya told Business Standard.
He, however, declined to comment on the names of the mining companies which had shown interest in having a strategic business partnership with the coal major.
A high-level empowered committee would scrutinise the proposals of the overseas coal miners. CIL may forge joint ventures with select mining firms or pick up stakes in their operational mines.
“The business model would depend on our overseas partners. CIL’s objective is to ensure availability of the raw material in the domestic market in a cost-effective manner,” said Bhattacharyya.
CIL with a cash reserve of around Rs 30,000 crore was looking to expand overseas by forging partnerships with global mining giants.
It may be noted that in March this year, CIL was awarded two exploratory coal blocks — A1 and A2 — in Tete province of Mozambique having an estimated reserve of one billion tonnes.
CIL is in negotiations with the Mozambique government for carrying out exploration work on the two coal blocks. While the exploration of these two coal blocks spread over 224 sq km was set to commence within a few months, the mining activities were expected to begin after three-and-a-half years.
CIL has also formed a special purpose vehicle called International Coal Ventures Ltd (ICVL) with four other state-run firms — Steel Authority of India Ltd, National Thermal Power Corporation, National Mineral Development Corporation and Rashtriya Ispat Nigam Ltd — for acquisition of overseas coal assets.
The race for acquisition of overseas coal assets was gaining momentum in view of the burgeoning coal demand in India. The domestic coal demand was projected at 730 million tonnes (mt) by 2011-12, but domestic coal production was pegged at 520 mt by then, thereby creating a shortfall of over 200 mt.
