Public sector Coal India Ltd. (CIL) has identified assets in Australia, in which it is keen to acquire equity stakes. Accordingly, it is planning to appoint an internationally reputed merchant or investment banker to carry out the financial due diligence.
Enquiries showed that the talks had progressed and the process of data analysis was now underway. CIL had earmarked about ₹6,000 crore for the purpose. Non-disclosure agreements are in place, and, hence, sources could not disclose any names.
The mine acquisition initiative is in line with CIL’s plans to set up overseas businesses involving coking coal and high-grade low-ash thermal coal. Its strategy is to acquire the coal resources, produce them and import the output into India. The production would either be through opening of new mines or through equity participation in working mines on production-sharing basis.
In the past, CIL had tried to acquire mines and had taken several initiatives in this respect. In Africa, it had set up a company called Coal India Africana Limitada in Mozambique after being granted prospecting licences for two blocks.
However, that effort came to a nought on account of unviable operations. The move to jointly scout for overseas properties through a power PSU, two steel PSUs and a mineral PSU through the International Coal Ventures Ltd (ICVL), too, had failed to yield tangible results.
The present move had been initiated through Coal Videsh, CIL’s own arm.