An Indian coal ministry official has indicated that state run company, Coal India Ltd. (CIL), is looking to acquire international assets in Australia and Botswana.
The company is currently examining three proposals from Australian companies and has created a corpus of Rs 6000 crore for acquisitions.
“Coal India is examining three proposals from Australia. It has siged non-disclosure agreements with three firms and the proposals are at the level of board sub-committee,” the official said.
Earlier in 2013, CIL invited birds for acquiring assets abroad, in a move that would help meet potential coal shortages as the company struggles to enhance its output.
CIL is also looking at a government-to-government arrangement in Botswana, whereby the company would acquire, develop and operate coal blocks and then export the produce to India.
The proposed partnership is understood to be of similar ilk to that of CIL's bilateral partnership with Mozambique, as per which the company secured two blocks in the country’s Tete province, with reserves estimated to exceed 1 billion t.
"CIL is exploring a government-to-government deal. It is quite interested in owning coal blocks in Botswana that has about 200 billion t of coal reserves," the official said. "However, the company needs to ensure adequate infrastructure availability for exports from Botswana, as it is a landlocked country.”
Dipesh Dipu, partner at Jenisse Management Consultants, said Botswana was being a considered as an investment opportunity by many countries as it has one of the largest coal reserves in Africa.
"The only concern is that country is landlocked. Distance to both the East Coast and the West Coast from Botswana is likely to be in excess of 1500 km. Moreover, there is no rail network at present. If such infrastructure is made available, it is definitely a good proposition," Dipu said.
Edited from various sources by Samuel Dodson
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