The Indian government has initiated exploratory talks to acquire some assets of Solid Energy, a state-run coal mining company of New Zealand.
Follow up talks of the initial discussions held between steel minister Beni Prasad Verma and chief executive of Solid Energy New Zealand Ltd Garry Diack during the former's visit of Australia and New Zealand in January are taking place, sources said.
If the talks fructify and a deal is struck eventually, International Coal Ventures Ltd or ICVL, a consortium of five public sector companies led by SAIL, might strike its first success.
SAIL chairman CS Verma, in fact, had gone on record last week saying the consortium is indeed looking at assets in New Zealand and Australia without disclosing the identity of the target companies.
State-run Solid Energy, which produces about 4 million tonnes of coal a year and exports a part of it, is passing through difficult times hit by the double whammy of depressed commodity prices and appreciating local currency, resulting in mounting losses and forcing it to restructure operations.
The company has opted for a bail-out package from the government, besides looking at selling some of its mining assets to foreigners as well, an opportunity India is now keenly exploring.
While admitting that the meeting between Diack and Indian steel minister had indeed taken place, Solid Energy denied any immediate plans to sell any asset.
"Solid Energy receives many inquiries about the sale of assets and there are currently no plans to sell any strategic assets," spokesperson Bryn Somerville told dna, when contacted and asked specifically if Stockton opencast mine is up for sale.
The New Zealand government might defer its decision to sell any of Solid Energy's assets to any foreign party until the benefits from the financial restructuring and bail out programme from the government is in process.
However, given the Solid Energy's precarious financial position, the government will sooner or later consider selling off the assets.
For the six months ending December, Solid Energy has suffered a 28% fall in revenue, due to continued weak international coal prices and reduced off take from local customers, resulting in loss of New Zealand dollar $40.9 million including a one-off restructuring costs of NZ$12.4 million.
"Solid Energy's financial recovery is likely to be prolonged and will depend on a number of factors including continuing improvement in the company's business performance and higher prices in international coal markets. The strength of the New Zealand dollar continues to adversely impact profitability," a company press release said.
During the period, Solid Energy completed a major and prolonged period of restructuring which started in August 2012, when management and support jobs were shed and production was cut as costly underground mining at Huntly could no longer be justified.