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| Peabody, 11 others shortlisted to bid for CIL offtake pact |
| Press Trust of India / New Delhi Aug 24, 2010, 13:36 IST |
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 The world's largest coal producer Coal India is learnt to have shortlisted the US-based Peabody Energy and 11 others to bid for its ambitious proposal for sourcing dry fuel to meet growing domestic demand.
"As many as 12 global firms, including Peabody, have been shortlisted for Coal India's offtake agreement. The PSU has now floated second round of expression of interest, after which it plans to initiate final bids for the agreement," a person in the know of the development told PTI.
The offtake agreement, a part of CIL's three-point strategic initiative to forge global alliances, is aimed at sourcing dry fuel from global companies. Besides offtake pact, the navratna firm has planned equity infusion and forming joint ventures to expand its global footprint.
"The 11 other firms are also from countries like the US, Indonesia and Australia," the source added.
CIL, which filed the draft prospectus for a mega IPO a fortnight ago, has put conditions for the companies to evince interest in the offtake agreement.
"One major criteria is that any company from-- Australia, South Africa and the US-- which evinces interest in the pact should have an annual coal production of 2 million tonnes.
"But for Indonesian firms, the production condition is 1 million tonnes," the source added.
At present, the demand-supply gap of coal is around 80 million tonnes, which is projected to double in the next few years. To meet the widening gap, Indian companies, government- run as well as private ones are actively scouting for overseas coal assets to mine and import the dry fuel.
CIL had earlier said it will import around six million tonnes of coal for power firms like NTPC. The country had a coal output of about 532 million tonnes in the last fiscal, over 85 per cent of which was produced by the PSU.
Coal India has already shortlisted the US firms Massey Energy and Peabody Energy, besides Indonesian Novem/Sinarma, for a possible partnership either through JV or equity infusion.
"The company is still awaiting the due diligence reports on mining assets of the three companies, after which a final call will be taken," the source said. Earlier CIL had received as many as 59 proposals from global firms for such ventures.
The PSU expects to import 50 million tonnes per annum (MTPA) of coal from such projects in the next few years to meet the rising domestic demand mainly from the power space.
Coal India has built a war chest of Rs 6,000 crore for foreign ventures this fiscal, Coal India Chairman P S Bhattacharyya had earlier said.
CIL, which is sitting on a cash pile of over Rs 30,000 crore, already has coal assets in Mozambique.
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