Government-owned coal behemoth Coal India Ltd (CIL), which is scouting for overseas coal assets, wants to rope in foreign partners by March 2010. The company is, in fact, drawing up a presentation which will help it in the selection process. CIL will start work on the presentation from December and is looking at countries like Australia, the US, South Africa and Indonesia for partners.
CIL chairman Partha S Bhattacharyya told FE this exercise would help CIL explain upfront what it is looking for, and thus, ensure transparency in the selection procedure.
Bhattacharyya said a committee has been formed, with the Central Mine Planning and Design Institute (CMPDI) chairman heading it, to prepare the presentation format and this will be placed for clearance in the next board meeting on October 15.
Following CIL?s expression of interest (EoI), 52 companies have shown interest to partner with CIL, of which ?42 are good offers?, Bhattacharyya said.
?Most of the companies have identified coal assets and they can move ahead with mining once a deal is struck,? he added.
CIL?s main intent is to bridge the country?s demand-supply gap and through such deals it wants to ensure that coal from foreign mines costs less than the general import price. In 2008-09, CIL imported 59 mt coal with prices at its peak at $60-65 for thermal coal. Playing in volumes would be the crux of business for miners in case of three-four years contract, according to Bhattacharyya.
However, securing long-term contracts is one of the many options of a strategic alliance. There can be other models which CIL will look into before getting into any deal. CIL can invest up to $1.5 billion for securing foreign coal.