Having acquired two blocks in Mozambique on a bilateral level, Coal India Ltd (CIL) is taking a similar route in South Africa too.
According to sources, CIL will soon sign a memorandum of understanding with the South African government for exploration of coal blocks and for setting up a separate subsidiary in that country. Last year, the firm had signed an MoU with the Limpopo province in South Africa in this regard and had even invited expression of interests from consultant firms in Africa to help in coming up with a South African subsidiary. According to sources, CIL has now cancelled this tendering process to take forward the matter on a bilateral front.
“Now, we have cancelled that tendering process, as India is looking to have an MoU with the South African government and wants to take up the matter on a bilateral front. As per this, the company can look for mines in any of the nine provinces in that country, while the MoU with Limpopo is still valid,” said an official source close to the development. CIL already has a subsidiary in Africa with the name Coal India Africana, for handling Mozambique operations.
The firm’s chairman and managing director S Narsing Rao had stated that rather than participating in a bidding process, CIL would be looking at taking over coal blocks on a bilateral route in African and South East Asian countries.
Meanwhile, the Maharatna major has reportedly appointed Tribeni Minerals Mozambique for exploration of its Mozambique blocks and production in the blocks are expected to happen by 2016-17.
The blocks were awarded to CIL in a bilateral route in 2009 and the local government had set a timeline of five years till 2014 for the company to develop it. The exploration work was awarded this time after cancelling the tendering process twice before.
The two exploratory blocks — A1 and A2 — were allotted to the company by the local government and A1 block is estimated to have reserves of over one billion tonne, including thermal and coking coal, covering an area of more than 224 square kilometres. The firm plans to invest $400 million, if viable deposits are found, and was planning to import 10 million tonnes of coal with in 10 years.
