Coal India vets EoIs from 52 global firms

Coal India Ltd (CIL) has formed a high-powered committee to scrutinise expressions of interest (EoIs) submitted by the 52 shortlisted global mining companies for a strategic partnership in mines in Australia, Indonesia, US and South Africa.

CIL will decide on the level of participation of these companies, which, it said, could be through three routes — it can be either a joint venture agreement, an outright purchase or it may form a joint venture to jointly scout for mines.

The “first level” of scrutiny will take a couple of months and a clearer picture would emerge by December.  

A senior official of Coal India told DNA, “We would go through levels or stages. Coal India is now examining a specific format, which will be provided to all these companies who will make a presentation to us. The kind of partnership that we would want to enter would be decided on a case-to-case basis.”

Although Coal India declined to divulge names, sources hinted that mining majors like Rio Tinto, BHP Billiton and Hancock Prospecting have evinced interest in partnering with Coal India.

“There is no uniform format in striking a strategic partnership. On a case to case basis, we will explore possible JV options or an outright purchase of an existing mine. We could also form a partnership for scouting properties,” the official said, adding, “We could do away with a majority stake in a company if the mine, say, is in a running condition and so there could be an offtake agreement. For virgin greenfield projects, there could be equal partnership. Investment will be on the specific asset,” he added.

Coal India, which had earlier thought of acquiring mines through a direct participation, has now switched over to the tendering mode, where most companies can participate.
Coal India’s international activities gained momentum with the recent visit of its top brass along with coal ministry officials to Australia in the first week of September. Mining practices adopted in Australia is considered the model with involvement of large capacity sophisticated technology and its management. 

Coal India, which is the world’s largest coal miner, is keen on acquisitions of thermal coal assets globally to supplement its increasing imports in the long run and to plug any shortage in future.

Meanwhile, Coal India is also looking at setting up a wholly-owned subsidiary in Mozambique. CIL would have an 85% stake and the balance would be held by a Mozambique-based mining company.