The Hindu : Business : 5 PSUs to buy mines abroad

Online edition of India's National Newspaper
Thursday, Dec 06, 2007
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5 PSUs to buy mines abroad

Sujay Mehdudia

NEW DELHI: Five public sector companies — Steel Authority of India Limited (SAIL), Rashtriya Ispat Nigam Limited (RINL), National Thermal Power Corporation (NTPC), Coal India Limited (CIL) and National Mineral Development Corporation (NMDC) — have jointly decided to invest Rs. 3,500 crore for acquiring coal mines abroad.

This step has been taken primarily to meet the rising demand of the steel industry, the power sector and others in view of the massive economic growth and thrust on developing infrastructure.

Official sources said the Government had already approved the formation of a special purpose vehicle (SPV) with the five PSUs as constituents for this purpose. This is to ensure supply of coking coal and high quality thermal coal to meet the demand within the country.

The sources said SAIL and CIL had decided to pool in Rs. 1,000 crore each as an initial equity capital, while the other three PSUs would be contributing around Rs. 500 crore each. The approved initial authorised capital of the SPV had been fixed at Rs. 10,000 crore.

According to Minister of State for Coal and Mines Dasari Narayan Rao, Coal India Limited (CIL) through its subsidiary Coal Videsh is also exploring opportunities for acquisition of coal properties in Mozambique, Zimbabwe, South Africa, Canada and Australia. The total coal reserves in the country stand at 255.17 billion tonnes (222.90 billion tonnes of non-coking coal and 32.27 billion tonnes of coking coal) at present.

Due to limited availability of coking coal and low ash non coking coal, a part of the demand of such coal is met through imports and the actual coal import in 2006-07 stood at 45 million tonnes.

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