Replies to post #795 on Coal

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CIL to set up mines overseas

http://www.hindustantimes.com/news/181_1536008,00020008.htm

Press Trust of India New Delhi, November 3, 2005

World's largest coal producer, Coal India Ltd is looking at acquisition of mines in Africa, Australia and Indonesia to cut import of high grade, low ash content coal into the country.

Coal Videsh Ltd, CIL's 100 per cent subsidiary, wants to acquire stakes in either running coal mines or a coal block in South Africa, Australia, Indonesia, Zimbawbe and Mozambique capable of producing metullargical coal (used for manufacturing steel) and low ash, non-coking coal (used for producing power), CIL Chairman and Managing Director Shashi Kumar told reporters in New Delhi.

"We have submitted proposal for forming Coal Videsh Ltd to the government for approval. We expect necessary clearance by end of current financial year," he said.

The company has sent its team scouting for mines to African continent but initial attempts at projects in Australia and Mozambique have failed to yield results.

"Coal prices (worldover) are very high," he said but did not say the amount of money CIL was willing to spend for its overseas venture.

Coal Videsh is inspired by success of ONGC Videsh Ltd, a subsidiary of India's largest oil and gas producer Oil and Natural Gas Corp (ONGC) for overseas oil and gas field acquisitions.

Faced with reserves which meet only 30 per cent of the oil demand and barely half of the gas requirement, OVL has acquired properties in 13 countries including Australia, Egypt, Cuba, Iran, Iraq, Ivory Coast, Oman, Qatar, Russia, Sudan and Vietnam.

Kumar said India, which has world's 10 per cent of coal reserves in 242 billion tonnes, faced a peculiar problem of coal being high in ash content.

Of the total reserves, 93 billion tonnes were proved reserves and only 52 billion tonnes recoverable.

"India has been importing low ash content coal and our overseas venture is aimed at securing mines which could supplement these," he said.

CIL, which posted a net profit of Rs 4,880 crore on a turnover of Rs 30,600 crore in 2004-05, may also enter into barter deals where it could offer a stake in its mines in India to a foreign firm in lieu of getting a stake in overseas mines, Kumar said.

Coal makes up for 55 per cent of India's energy basket with CIL producing 323.6 million tonnes of coal in 2004-05 (up from about 206 million tonnes in 2003-04).