Coal India’s seeks US$2bn in investment to secure supply base

The world’s largest coal producer, Coal India, may invest around US$2bn over the next four years to buy stakes in overseas coal assets, its chairman Partha S Bhattacharyya told Dow Jones Newswire in an interview. “We want to enhance the availability of coal in this country by getting coal from overseas, but on terms that are distinctly better than term imports,” Mr Bhattacharyya said.

Last July, Coal India floated a tender seeking joint venture initiatives in coal mining in Australia, South Africa, Indonesia and the US. It has received 17 proposals to buy stakes in coal-producing areas or to form joint ventures for greenfield projects. The company is carrying out due diligence on 10 proposals. Coal India will generate the funds for purchases of stakes in assets abroad from its internal accruals. “We have $6 billion in banks and that is something we don’t like,” Bhattacharyya said.

The rapid development in power generation capacity is driving coal demand and India imported 59Mt of the product in FY2009. With local supplies lagging behind demand expansion, imports could reach 150Mt in 2016-17, according to the Wall Street Journal.