CIL eyes buying another US-based firm's coal assets

Even as talks to buy an around 15% stake in US-based Peabody Energy's coal properties in Australia near their conclusion, state-run Coal India is eyeing the West Virginian assets of another American company, a top executive has revealed.

The world's largest coal producer has earmarked Rs 6,000 crore to fuel its inorganic growth overseas overseas over the next 2-3 years in order to expand its coal base and meet burgeoning demand at home, the official said.

"Due diligence is on to buy up to a 15% stake in the Australian assets of US-based Peabody Energy. We hope the deal will be sealed soon. We are also looking at buying some stake in another company in West Virginia. We are upbeat and aggressive about international acquisitions and have earmarked Rs 6,000 crore for the same," Coal India Director (Personnel and IR) R Mohan Das told PTI here.

He, however, declined to divulge any details on the prospective acquisition of active mines in West Virginia, saying the talks are at a preliminary stage.

The PSU's Chairman and Managing Director, Partha Bhattacharya, had earlier said talks were on with US-based Massey Energy and Peabody. However, none of the deals has fructified yet.

While Peabody Energy is the world's largest private sector coal firm, with annual sales of 246 million tonnes and an estimated 9 billion tonnes of reserves in the US and Australia, Massey Energy is the fourth-largest coal company in the US, with sales of 40 million tonnes and 2.3 billion tonnes of high-quality coal reserves.

The company is also looking at buying mines in Indonesia to meet the growing demand for coal in India, mostly in the power sector.

While India's annual coal demand will exceed output by 100 million metric tonnes in the next few years, the company expects to meet half the shortfall from such acquisitions, Das said.