Leading coal producer Coal India (CIL) has earmarked a fund of INR40bn ($660.2m) this fiscal year to develop blocks in Mozambique and acquire global assets.
Coal India, which meets more than 80% of the coal requirements of its domestic market, has been looking to acquire international assets in the last three years, in order to overcome delays in mine start-ups in its domestic market.
Through a government-to-government agreement, the state-owned Coal India acquired the blocks in Tete province of Mozambique in 2009, which are spread across 200km².
"The capital expenditure for 2013-14 has been envisaged at Rs 5,000 crore plus an additional ad hoc provision of Rs 4,000 crore for the acquisition of coal assets abroad and development of coal block in Mozambique," Coal India said in its annual report and accounts for 2012-13.
According to Mozambique's recent estimate, the two blocks have reserves of nearly one billion tonnes of coal.
The company has been exploring the blocks through its wholly-owned subsidiary Coal India Africana (CIAL).
Of the awarded 10,000m drilling contract in 2012, the company had completed 5,100m as of 31 March.
India's Union Minister of State for Coal Pratik Prakashbapu Patil told Telegraph India that exploration activity at the site is scheduled to be completed in 2014 and the company will then take a final decision on development of the blocks.
With steep drop in coal and iron ore prices globally, several international assets are being put up for sale in Australia, the US, Africa, Mozambique, Chile, Columbia and Indonesia.
Coal India, which considers this is an ideal time to acquire overseas coal assets, has received 32 proposals from foreign mines this year, of which 17 were shortlisted.
CIL is also looking for assets in Indonesia, South Africa, Australia, the US and South America.
In addition, the government is in the process of selecting a consultant to conduct a study on restructuring CIL and expects to receive a report by December.
Image: Coal India meets more than 80% of the coal requirements of its domestic market. Photo courtesy of Dan/Freedigitalphotos.net.