The Hindu Business Line : CIL may acquire coal block in Russia

COAL India Ltd (CIL) is planning to acquire a coal block in Russia. The company has recently identified a block in that country and a team of experts would be going to Russia next month to make an on-the-spot assessment of the potential reserves, company sources told Business Line.

"It is a small block. We have been given the impression that there are around 60 million tonnes reserves. Our team of experts would try to assess whether there are more reserves in the adjoining areas because worldwide such small reserves rarely exists. There is no reason that if coal has been formed over centuries in a particular spot, why there should not be more coal in the adjoining areas," officials said.

The block, according to official sources, belongs to a steel manufacturing company, which no more uses coal and has changed its technology. "They want to sell the mine which is why we are examining it," officials said.

However, the public sector coal giant is also continuing its search for more mines in counties such as Australia, South Africa, Indonesia and Mozambique.

The company is also negotiating a joint venture deal with a medium-sized Indonesian mining company for developing blocks in Australia. "This company has come to us and proposed a joint venture to develop blocks in India. We've suggested a similar reciprocal arrangement and said that CIL will help it establish a presence in India and in exchange it should help India establish a presence in the Australian mining sector," officials said.

In June this year, CIL and the Steel Authority of India Lt (SAIL) had initiated talks for setting up a joint venture for acquiring coal blocks abroad. The CIL board has already cleared setting up of CIL Videsh as a wholly-owned subsidiary with a proposed equity base of Rs 100 crore.

CIL is likely to form the joint venture company through CIL Videsh.

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