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CIL speeds up African plans

Source : BUSINESS_STANDARD
Last Updated: Wed, Aug 29, 2012 19:21 hrs
COAL EMISSIONS

With the commitment of the new fuel supply agreements set to fall in place, the state-run Coal India Ltd has speeded up its African plans now foreseeing a higher demand in future.

As part of its plans to look for more overseas assets in a diplomatic route, the Maharatna major has invited expression of interests from consultant firms in Africa to help the firm in coming up with a South African subsidiary, for which the last date is this week. Moreover, the firm has also speeded up the development plans of its Mozambique mines inviting a third tender for exploration which will close this month.

"We want to form separate subsidiary for South Africa and hence would appoint a consultant soon. The idea is to look for assets in later stages," said a top company official close to the development. CIL already has a subsidiary for Mozambique operations with the name Coal India Africana Limitada.

The coal major had signed a memorandum of understanding with Limpopo province in South Africa in 2011, to jointly develop mines in that country. S Narsing Rao, the chariman and managing director of CIL too had made it a point that the firm will look for assets in bilateral level in African and South East Asian countries rather than going for a competitive bidding.

Meanwhile, the last date for submitting bids for the exploration to develop two blocks in Mozambique that houses about one billion tonnes of coal reserves is August 31. This is for the third time in a row that the firm has invited bids for exploration of these coal blocks.

The blocks were awarded to CIL in a bilateral route in 2009 and the local government had set a timeline of five years till 2014 for the company to develop it.

When the bids were canceled first time in February 2011, it was cited that "some players wanted the earnest money deposit in dollars, but somebody submitted it in Indian rupees and others in cheque." While the second time it was the rupee dollar imbalance which came as a hurdle.

The two exploratory blocks - A1 and A2 - were allotted to the company by the local government and A1 block is estimated to have reserves of over one billion tonne, including thermal and coking coal, covering an area of more than 224 square kilometres. The firm plans to invest $400 million, if viable deposits are found, and was planning to import 10 million tonnes of coal in 10 years.


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