Coal India eyes mine acquisitions in Indonesia

Pursuing its overseas expansion strategy, state-owned Coal India Ltd (CIL) is actively looking at as many as five proposals for acquisition of mines in Indonesia.

CIL's overseas plans come at a time when the company is facing flak for acute shortages of coal, which is hurting country's key sectors including power and fertiliser.

Analysis: Why investing in PSUs is a good idea

"Coal India is examining four to five proposals and they all are in Indonesia," according to Coal Ministry sources. The sources, however, refused to give a timeline as to when they are likely to be finalised.

Coal India in September had said that it invited an expression of interest inviting global companies to offer overseas assets.

"In pursuant to the Government of India's guidelines to acquire raw material assets abroad, a notice inviting proposal offering overseas coal assets to CIL was floated... A number of proposals has been received and are being evaluated," the company had said.

Coal Minister Sriprakash Jaiswal earlier said that acquisition of coal mines overseas should be done in an aggressive manner to meet the country's energy requirements. In order to tide over the fossil fuel shortages, the government is also proposing to import coal.

Meanwhile, CIL has already finalised bids for further drilling its twin mines in Mozambique. Two coal blocks - A1 and A2 - at Motaize, in Tete Province of Mozambique, are spread over 200 sq km.

CIL has proposed a capital outlay of Rs 25,400 crore in the 12th Five Year Plan, plus an ad-hoc provision of Rs 35,000 crore to acquire coal assets abroad and develop the acquired coal blocks in Mozambique, according to the coal PSU.

The capital expenditure for current fiscal has been envisaged at Rs 5,000 crore, along with additional ad-hoc provision of Rs 4,000 crore to acquire coal assets abroad and develop coal blocks in Mozambique, it said.

The demand-supply gap of coal was 135 million tonne (MT) last fiscal and may widen 185.5 million tonnes in 2016-17.