The Hindu Business Line : SAIL looking at minority stake in coal mines abroad

New Delhi, July 12 Steel Authority of India Ltd (SAIL) is looking at picking up minority stakes in coal mines not only in Australia but also in other parts of the world.

This is in addition to the acquisition that are proposed to be undertaken through a special purpose vehicle (SPV), which would be promoted by five public sector companies to acquire coal mines abroad. This proposal is awaiting Government clearance. The five public sector units that that the Government has identified to be part of the consortium in the SPV are SAIL, Rashtriya Ispat Nigam Ltd, National Mineral Development Corporation, National Thermal Power Corporation and Coal India Ltd.

“SAIL is looking at picking up minority stake in coal mines, may be between 10 and 20 per cent, so that the future requirements of the company are met. We have invited the expression of interests (EoIs) and there has been good a response. But nothing has been finalised so far,” Mr S.K. Roongta, Chairman, SAIL, told Business Line here.

Direct investment

According to him, SAIL would be investing directly for picking up the minority stake and would look at going with SPV partners for bigger deals.

“Since we do a lot of blending we require better quality hard coking coal which is close to the indigenous variety. So it would be useful to pick up a minority stake in a mine and have a long term purchase agreement so that the requirements are met,” Mr Roongta added.

Currently, SAIL meets its coking coal requirement from indigenous source of about four to five million tonnes (MT) and over 10 MT from imports. The company in order to meet the growing requirement and to reduce dependency on imported coking coal source is now planning to develop coking coal mines as captive source.

During the current year production is almost being double to 1.3MT against the last year production of seven lakh tonnes.

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