Coal India to acquire assets in Australia, Botswana

17 July 2013 (Last Updated July 17th, 2013 18:30)

Coal India (CIL) is considering acquiring stakes in coal assets of Australia and Botswana in order to overcome delays in mine start-ups in the domestic market and boost production.

Caol India

Coal India (CIL) is considering acquiring stakes in coal assets of Australia and Botswana in order to overcome delays in mine start-ups in the domestic market and boost production.

India is currently facing a severe shortage of coal, prompting the government to consider imports.

Coal India has earmarked INR60bn ($1bn) to fund overseas acquisitions in this fiscal year.

CIL executive said was quoted by Business Standard as saying that the company has signed non-disclosure agreements with three Australian miners in April 2013 to buy stakes in the range of 25% to 50%.

"The three mines have a combined production of 25 million tonnes per annum currently," the executive added.

The company is also exploring options to acquire coal mines in Botswana, a landlocked country in the African continent with huge coal reserves.

"India is currently facing a severe shortage of coal, prompting the government to consider imports."

A senior coal ministry official told The Economic Times that CIL is looking for an agreement between the two governments in order to acquire, develop and operate assets and import the material to India.

"However, the company needs to ensure adequate infrastructure availability for exports from Botswana as it is a landlocked country," the official added.

If the government-to-government agreement materialises, it would be similar to the arrangement with Mozambique, through which Coal India acquired two blocks in Tete province in 2009.

Besides Australia and Botswana, the company is also exploring options to acquire assets in the US and Indonesia.

Coal India, which is battling to meet its domestic supply commitments, has been looking to acquire international assets in the last four years, but has failed to strike a deal so far.

The government-owned company meets more than 80% of the coal requirements of the local market. CIL expects to import about five to six million tonnes of coal annually this fiscal for supplying to power firms.


Image: Coal India meets more than 80% of coal requirements of the domestic market. Photo courtesy of Dan/Freedigitalphotos.net.

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