Coal India deal with Peabody may get delayed

Coal India Ltd's plan of picking up a 15% stake in US-based firm Peabody Energy's 600 million Australian dollar mining project in Australia may get delayed, as the coal major is awaiting the government's response on certain issues pertaining to the deal.

"It (the deal) will take some time as there are certain issues -- like the company should be listed -- related to the deal, which Coal India has referred to the government. After getting a response from the government, the decision would be taken," a top official in Coal India told PTI.

Both the companies are mulling the formation of a joint venture company (JVC) to implement the project at the Wilkie Creek coal mine, in Queensland, Australia, owned by Peabody.

The US-based firm will have an 85% holding in the JVC, while the rest will be owned by Coal India Ltd (CIL).

The proposal had come up for discussion in a Coal India Board meeting held last month, wherein it was decided to refer the same to the Coal Ministry for certain clarifications.
    
"The Coal Ministry had earlier said that acquisition of the property in the overseas market will be confined to listed companies so that the there is not much problem during the valuation of the deal," an official in the Coal Ministry had earlier said.
    
However, since the proposed company would not be listed, "The board had said to refer the proposal to the government seeking clarifications whether Coal India can go ahead with the deal if the principal (Peabody) is listed," the official had added.
    
Earlier, CIL had said it was likely to buy up to a 15% stake in Peabody Energy Corp's Australian assets in early 2011-12 for an estimated $100 million (about Rs 450 crore).
    
Peabody Energy is the world's largest private sector coal company, with sales of 246 million tonne (MT) in 2010. The company claims to have 9 billion tonne of reserves and manages and owns an interest in 28 mining operations in the US and Australia.