CIL shortlists Peabody, 11 others for sourcing coal

The world’s largest coal producer Coal India Limited (CIL) is learnt to have shortlisted US-based Peabody Energy and 11 others as possible partners for sourcing coal to meet growing domestic demand.

“As many as 12 global firms, including Peabody, have been shortlisted to bid 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 said.

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 tonne,” 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.