State-owned Indian coal miner, Coal India (CIL), is likely to take advantage of a revision of Indonesia's mining rules to buy mining assets in that country as the current economic meltdown throws up attractive opportunities.
Mining assets abroad have gone down in price by as much as 60 to 70 percent, making acquisitions attractive, say government representatives. More freedom under government rules is making it easier for CIL to buy overseas assets.
“Acquisition of mines abroad is under active consideration and CIL after being accorded the Navratna status can go ahead for acquisitions by itself,” Santosh Bagrodia, minister of state for mines, told the Hindustan Times.
He said CIL can acquire assets without the government intervention through its foreign arm, Coal Videsh Ltd.
CIL is interested in acquiring three mining blocks with estimated reserves of over 120 million tonnes in Indonesia to enhance the supply of dry fuel for its consumers in India. “CIL is targeting those coal blocks in Indonesia which their government has taken back from the local firms which failed to develop them,” a coal ministry source said adding that given the limited resources and a lack of advanced technologies, Indonesian companies that are given mining rights are generally not able to harness the full potential of the mines and end up looking for joint venture partners from overseas.
Under revised rules in Indonesia, overseas companies may now be allowed individual leases to carry out mining operations. Earlier any foreign miner had to tie up with local firms.
Coal India is also eying a thermal-cum-coking coal block in Mozambique for which it would submit bids soon.
Mr Bagrodia and senior officials from CIL also visited the US recently, scouting for metallurgical coalfields.
A special purpose vehicle, International Coal Ventures Ltd, has been floated by five public sector units to identify and acquire overseas coal assets. CIL, part of the consortium, is searching for coalmines in the US, Canada, Australia and Indonesia.
Source: Hindustan Times
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