ICVL close to strike maiden acquisition deal

Meant for acquiring overseas coal blocks, International Coal Ventures' (ICVL) dry spell is likely to end soon as it is in advanced stages of discussion with Aquila Resources for buying its Washpool project in Australia.

Aquila Resources, in a filing to Australian Stock Exchange, stated that it is in advanced stages of discussion with the consortium of five Indian state-run firms.

ICVL Chairman CS Verma, however, could not be reached for comments.

"The company confirms that it is in advanced discussions with ICVL, however, at this time, no binding offer capable of acceptance has been received from ICVL," Aquila Resources said.

Sources in the know said that ICVL might have to dole out a little over $300 million for buying the asset, which is owned by Aquila Resources. However, ICVL Board is empowered to take investment decision of up to $300 million on its own. Proposals exceeding $300 million would have to be vetted by an empowered committee of secretaries.

Yet to start production, the open-cast Washpool project would produce up to 2.6 million tonne coal a year and around 38 million tonne over the 15 to 20 year life of the project. Production from the mine is expected to start next year.

ICVL has to build essential infrastructure such as coal handling and processing plant, mine infrastructure area, water management systems and train load out area among others.

At the initiative of the Steel Ministry, ICVL was set up as a joint venture company with SAIL, CIL, RINL, NMDC and NTPC as the promoter companies for securing overseas coal assets.

It intends to own 500 million tonnes of met coal reserves by 2019-20. SAIL and CIL each hold 28% share and RINL, NMDC and NTPC 14% each.

The JV, however, has failed to acquire any asset since its inception in 2009.