CIL gears up to acquire mines abroad

Coal India Ltd, the country’s largest coal producer, plans to acquire three mining blocks with an estimated reserve of over 120 million tonnes in Indonesia to augment supply of the dry fuel for its consumers back home, a top company official said.

“We would speed up the acquisition of exploratory blocks in Indonesia as the government there has revised its mining rules, which we are told may allow companies to directly get a lease instead of tying up with local firms for the same,” Coal India Ltd (CIL) Chairman Partha S Bhattacharyya told PTI.

The blocks being targeted by the coal major are the ones that the Indonesian government has taken back from the local firms, which failed to develop them.

According to the earlier provisions of Indonesia’s mining laws, overseas companies were not alloted individual leases for carrying out mining operations, but had to tie-up with local firms for it.

“Local companies that are given mining rights generally do not possess advanced technology for mining operations, the reason why they seek joint ventures with foreign firms,” Bhattacharyya said.

Now that the provision is believed to have been amended, Coal India board has had several rounds of discussions and has decided to go for the Indonesian properties, he added.

Of the four blocks initially being looked into by Coal India in Indonesia, one is believed to have been taken over by a private Korean firm.

Asked about the capital expenditure likely to be involved in acquisition of the mining properties, Bhattacharyya said, “Money is not a problem, but risk.”

“As we have to spend public money, we have to be cautious and look into the risks involved in it,” Bhattacharyya said.

Besides looking at mining assets in Indonesia, Coal India is also eying a thermal-cum-coking coal block in Mozambique for which it would submit the bid soon.