Press Information Bureau
Government of India
Ministry of Coal
09-March-2011 15:28 IST
Acquisition of Coal Mines in Foreign Countries
Coal India Ltd (CIL) had floated a global Expression of Interest (EOI) in July 2009 for selecting a Strategic Partner(s) in preferred destinations like Australia, USA, South Africa and Indonesia to acquire stakes in existing or Greenfield coal resources under the following deal structures:

a. Equity investment by CIL with a long-term off-take contract at a price less than the prevailing import price.
b. Only long-term off-take contract on cost plus basis at a price less than prevailing import price, with financial assistance (if required) by way of loan from CIL for augmentation of production.
c. Formation of JV for exploration, development and operation of coal assets in any of the destination countries.

Through the above deal structures, CIL proposes to import coal with the dual objective of ensuring security of supply and insulation from the volatility of global prices. However, presently no acquisition proposal from South Africa is under consideration by CIL.

A team from Coal India had visited Malawi in May 2008. The visit had revealed that the coalfields in Malawi are not fully explored with even the geological prospecting undertaken not of the required precision and that re-mapping of the potential coal bearing areas in Malawi might be essential to identify suitable coal blocks for acquisition. However, it was felt that there was potential for co-operation in the coal sector.

This information was given by the Minister of State in the Ministry of Coal, Shri Pratik Prakashbapu Patil in reply to a written question in the Lok Sabha today.