Coal India Limited (CIL) had floated an expression of interest for selection of strategic partners from four countries namely Indonesia, South Africa, Australia and USA in July, 2009. After evaluation some of the proposals were short listed and due diligence activities were carried out for 3 brown-filed coal assets from listed companies one each in Indonesia, Australia and USA in May-June 2010. After seeking some clarifications from the Government regarding investing in unlisted assets belonging to listed companies and the minimum internal rate of return (IRR%), the matter was pursued in CIL but none of the assets short-list could be acquired. This information was given by the Minister of State for Coal, Shri Pratik PrakashBapu Patil in a written reply in Lok Sabha today.
He said that CIL has acquired prospecting license for two coal blocks in Mozambique through a wholly owned subsidiary Coal India Africana Limitada (CIAL) formed in Mozambique. A multi-disciplinary team of four senior executives have been posted in Mozambique since February 2012 and they have opened up office of Coal India Africana Limitada (CIAL) in Tete since March 2012. Upon obtaining environmental clearance for exploration activities, drilling activities have been started since November 2012 and about 3100 m drilling has been carried out till date. The geological mapping works of the coal concession area and majority of survey work have also been completed.
CIL has executed a Memorandum of Understanding with Provincial Govt. of Limpopo, Republic of South Africa with ultimate objective of development of coal assets in Limpopo. Initiatives have been taken for registration of a Wholly Owned Subsidiary of CIL in South Africa which will undertake activities of identification, exploration and development of coal assets in South Africa including those in Limpopo.
Further, CIL has recently floated expression of interest from investment bankers, owners/owner™s representatives for acquisition of coal assets abroad.
CIL has adopted provisions of Rs. 35,000 crores for acquisition and development of coal assets abroad to be spent in 5 years during the XII Plan period. Out of the aforesaid amount Rs. 10,000 crores has been allotted for exploration and development of coal blocks and creation of logistic infrastructure in Mozambique while the balance Rs.25,000 crores has been kept for acquisition and development of coal blocks in other countries like South Africa, Indonesia, Australia, USA, Columbia etc .
Government of India has brought out a policy guidelines on acquisition of RAW MATERIAL assets by Central Public sector Enterprises (CPSEs) in Oct 2011. The Board of Directors of CIL in its 251st meeting has adopted this policy for implementation. CIL will follow the guidelines suggested in the policy document and will ensure free and fair dealings.
Tags: CIL, Coal India