CIL urges govt to relax investment rules for 2 overseas mines

The world's largest coal miner Coal India Ltd has zeroed in on two overseas coal assets, one in Australia and the other in Indonesia, for acquisition and expects to begin serious dialogue with the owners soon.

"At this moment, we have shortlisted two unlisted coal companies, one in Australia and one in Indonesia. We are awaiting some relaxations from the government to go ahead with serious negotiations," a top CIL official, who declined to be named, told PTI.

"Names cannot be divulged for obvious reasons, but both have close to five million tonne of coal. The Indonesian company has several blocks, while the Australian company has one large block," he said.

The official said there was no major contender for these blocks.

The PSU has put together a war-chest of Rs 6,000 crore for acquisition of the mines.

"The level of stake is yet to be decided, depending on various factors like valuation," the official said.

CIL was likely to take a stake between 30-40% in these coal assets.

In this regard, CIL has approached the Finance Ministry and government for relaxation of PSU guidelines stipulating a minimum 12% internal rate of return on investments. It has also sought to sidestep the rule that only the mines of listed companies should be acquired.

"CIL is expecting to receive the relaxations by August," Coal Secretary Alok Perti said.

Coal India is trying seriously for some coal equity on its own, besides partnering with Coal Videsh, a JV company formed between Indian PSUs, to buy assets overseas.

Besides buying a stake in coal companies, CIL was also at an advanced stage of finalising a long-term coal supply agreement with foreign sources.

India currently faces a coal demand-supply shortfall of 142 million tonne.