Coal India Ltd is moving closer to picking up a participatory stake in Peabody Energy's Australian asset for less than $200 million.
The joint venture will offer CIL access to equity coal for shipments to India.
On joint ventures
Responding to queries on its joint ventures abroad, the CIL Chairman, Mr Partha S. Bhattacharyya, said, “There seems to be a closer meeting of minds with regard to our discussion for Australian asset (of Peabody). It may lead to concrete end in the near future.”
He later admitted that the discussions were on with Peabody and the pricing differences had “narrowed” down.
The deal includes buying stake at a particular mine of Peabody in Australia and also a long-term offtake agreement.
“The deal will cost less than $200 million,” Mr Bhattacharyya said.
He, however, clarified that the company was yet to formulate any firm proposal in this regard for consideration of the board.
Meanwhile, the fate of a similar joint venture discussion with the Massey Energy for assets in the US has become uncertain, as the US-based company itself is reportedly up for sale.
Massey Energy
On CIL's interest in acquiring Massey, Mr Bhattacharyya said that the company had not received any such offer so far.
The CIL Chairman, however, was bullish in striking long term coal offtake deals with global majors.
“We have received a large number of proposals offering huge quantities for long term offtake. We are hopeful in striking such deals ensuring import of thermal coal in the country beginning this fiscal provided the pricing issues are resolved,” he said, adding that the company has involved the Central Vigilance Commission in formulating such deals.
“This is the first time we are entering in the global arena and we do not want to take any risk with regard to either our joint venture or long term procurement interests,” he added.
Underground mines
On the domestic front, the company's initiative to open high capacity (3-5 mt) underground mines may be successful as a number of bids are received for developing and operating a coking coal block (Kapuria) under Bharat Coking Coal Ltd.
It may be mentioned that the previous CIL tender for such projects did not receive any participation.
The company has also awarded the first of the 20 proposed washeries to Heavy Engineering Corporation, Ranchi. HEC will build the 5 mt washery with Chinese technology.
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