New Delhi — Coal India Ltd – the world’s largest coal miner, has floated a tender to engage merchant bankers to help it buy coal assets in Australia.
The type of tender is ‘pre notice inviting tender’ which means interested merchant bankers would meet company officials and give their suggestions on how the final tender should be before they can put in their bids.
“This is a draft tender. The bankers would come and give their suggestions on the 19th of June in a meeting, based on which the final tender will be set,” an official said requesting anonymity.
Coming in the backdrop of similar attempts to buy coal assets overseas in the last several years, Coal India’s move highlights the shortage of this resource in India and the pressure the public sector company faces to boost its supply.
In 2012, Coal India was at advanced talks with overseas companies such as US-based Massey Energy and Peabody Energy Corp and Indonesia’s Sinar Mas to buy mines or stakes, but abandoned the idea when it did not see favorable returns.
Particularly for steel companies that are set to boost production to 300 MnT by 2030-31 from a little over 100 MnT now, massive amounts of coking coal would be needed from overseas for their expanding plants, and this could be the rationale for Coal India’s repeated attempts for securing coal assets overseas.
A similar situation exists for thermal coal whereby the government’s ambitious electrification programme could lead to scarcity of the material.
The private sector Adani group is also pushing for its coal mine in Australia’s Queensland where it has doggedly held on to its plan despite severe protests from environmentalists and of late, media reports from Australia say Adani may be able to get the environmental clearance soon.
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