CIL and NTPC decide to pull out of ICVL
The ambitious plan to acquire overseas coal mines by International Coal Ventures Limited (ICVL) received a major setback with the decision of two of its members deciding to pull out of the consortium.
ICVL – a special purpose vehicle -- was set up on May 20, 2009 by Rashtriya Ispat Nigam Limited, Steel Authority of India Ltd, National Mineral Development Corporation, Coal India Ltd and NTPC – to acquire 500 million ton of metallurgical coal reserves by 2019-20.
CIL board took a decision to back out whereas the Ministry of Power has given permission to NTPC to pull out of ICVL as the special purpose vehicle has not struck a single deal to own any mine or enter into a joint venture with any overseas company.
Its efforts for outright purchase of mines or through a joint venture in Virginia (United States) have not fructified yet. In nine proposals, due diligence has been done but no deal could be clinched.
ICVL was set up with an authorised capital of Rs.10,000 crore and an initial equity of Rs.3,500 crore. While SAIL and CIL are having 28 per cent share each, RINL, NTPC, and NMDC picked up 14 per cent each.
“With two important constituents deciding to back out, ICVL may now come under the Ministry of Steel and the special purpose vehicle enjoying navratna status may scout for new partners or have to wind up,” a source in RINL told The Hindu .
Confirming the decision to pull out of ICVL, an official of NTPC said the completion of the process might take sometime.
ICVL despite its efforts has failed to make any progress in clinching deals to own mines in Australia a couple of years ago. NTPC and CIL are unhappy that the company’s focus is on acquiring coking coal mines whereas thermal coal is required for power generation.