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| CIL to get prospecting licence for Mozambique coal blocks soon |
| Jayajit Dash / Bhubaneswar Sep 18, 2009, 00:58 IST |
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The efforts of Coal India Limited (CIL), the world's single largest coal miner, to resume exploration of coal blocks have gathered steam as the Mozambique government is likely to issue it a prospecting license soon.
“All official formalities related to the grant of prospecting license have been completed. The Mozambique government has shown a very positive approach and we expect to get the prospecting license within a month or two,” a CIL official told Business Standard.
In March, CIL was awarded two exploratory coal blocks in Tete province of Mozambique with an estimated reserve of one billion tonnes.
The coal major would develop these two coal blocks through a joint venture with a state-run coal mining firm in Mozambique. The joint venture with the Mozambique mining firm would be forged by the fully owned subsidiary of CIL in that country. CIL has already formed a fully-owned subsidiary in Mozambique and the company has been registered.
Last month, a high-level delegation comprising the Union coal ministry and the top brass of CIL visited Mozambique to expedite the process of exploration of the coal blocks. While the exploration of the two coal blocks, spread over 224 sq km, was set to commence within a few months, the mining activities were expected to begin after three-and-a-half years.
The navratna coal company was keen on entering into a strategic partnership with the global mining firms in countries such as Australia, Indonesia, US and South Africa. Besides, CIL has formed a special purpose vehicle called International Coal Ventures Limited (ICVL) with four other state-run firms for acquisition of coal assets overseas.
The four other state-run firms which had a stake in ICVL were Steel Authority of India Limited (SAIL), National Thermal Power Corporation Limited (NTPC), National Mineral Development Corporation (NMDC) and Rashtriya Ispat Nigam Limited (RINL).
The race for buying overseas coal assets was gaining momentum in view of the burgeoning coal demand in India. The domestic coal demand was projected at 730 million tonnes (MT) by 2011-12 but domestic coal production was pegged at 520 MT, thereby creating a shortfall of over 200 MT.
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