One of the world's largest coal mining companies, Coal India, has signed non-disclosure pacts with Australian miners as part of its strategy to acquire international assets to overcome delays in mine start-ups in the domestic market and boost production.
The company has earmarked $1bn to fund overseas aquisitions this financial year and has recieved over 32 proposals from foreign miners.
Coal India chairman Narsing Rao told Livemint that the company is evaluating the process of acquisition.
"In fact, we have signed two to three non-disclosure agreements in Australia," Rao added.
This move comes after Coal India's failed attempts to acquire overseas assets between 2010 and 2011. The state-owned firm failed in its negotiations to acquire Massey Energy, Peabody Energy and Indonesia's Sinar Mas.
With the fall in prices of coal and iron ore internationally, several international assets are being put up for sale, mainly in Australia, the US, Africa and Indonesia, and Coal India, which is facing hurdles in its domestic market due to environment issues, land acquisition and civil liberties, has been scouting to buy an appropriate asset.
India is currently facing severe a shortage of coal, prompting the goverment to consider imports.
Meanwhile, Coal India has issued a work contract to an undisclosed firm to further drill up to 30,000m in two Mozambique blocks, presently the only overseas assets of the company, reports Economic Times.
This follows recent reports that the company was planning to relinquish its assets in the country due to infrastructure hurdles.
Coal India acquired the blocks at Motaize, in the Tete Province of Mozambique in 2009 through a deal between the two governments.
According to the local government's estimate, the two blocks have reserves of nearly one billion tonnes of coal.
The mines are spread over 200km² and Coal India expects the exploration may take two years or more.
Image: India is currently facing a severe shortage of coal. Photo: dan/FreeDigitalPhotos.net