In a shift from the original proposal, Coal India Ltd (CIL) will now hold a majority share of the equity in the joint ventures that are proposed to be set up for re-opening some of the abandoned mines of CIL subsidiaries, many of which have been lying closed since nationalisation. This would effectively mean that the joint ventures would now have to be compliant with the norms of Comptroller and Auditor General as also the Central Vigilance Commission.
Following an initial interest shown in operating the abandoned mines by ArcelorMittal in March 2008, CIL invited expressions of interest (EoI) to which several companies responded, including the world’s largest steel maker.
CIL had identified 18 mines for this endeavour, the plan being that individual joint ventures would be formed for these mines between the subsidiaries and the private sector company concerned.
Senior officials said that as per the recently issued government directives, CIL would hold a 51 per cent stake in the joint venture with the balance 49 per cent being offered to its partner.
As per the terms and conditions of the expression of interest, each of the partner was to have an equal share of the equity as well as the first right of refusal to the coal that would be raised from these mines.
“CIL will now call these companies for a meeting to discuss this issue,” the officials said. Enquiries, however, revealed that informal discussions had already been held and they ‘seem to be agreeable’.
Tender documents will now also have to undergo a change as these companies would now come under the purview of the statutory authorities. The companies which responded to the EoI include ArcelorMittal, Rio Tinto, S&T Mining (a joint venture of Steel Authority of India and Tata Steel), Essar Minerals and JSW Steel which had set up two outfits for bidding.
The 51 million tonnes demand-supply gap projected originally for 2011-12 the terminal year of the XI Plan has been revised to 81 million tonnes.
Two of the three coal producing agencies in the country — Coal India and private producers — are set to miss their production targets with only Singareni Coal Company likely to achieve its output target.