International Coal Ventures Ltd, a consortium of PSU firms for buying mines abroad, is close to clinching its maiden deal and is in advanced stages of an acquisition in Poland for about Rs 3,500 crore.

Considering the size of the mine, which has an estimated reserve of over 500 million tonnes, ICVL will tie up with an Indian steel maker for acquiring the coking coal asset, a source told PTI.

“ICVL is very serious on clinching the deal and has already appointed technical consultant and investment banker after carrying out proper due diligence,” the source said.

The Poland acquisition will help ICVL, which is carrying out due diligence in at least two other assets, to achieve its 2019-20 target of owning 500 mt coking coal reserves five years in advance. It will also aid in reducing India’s forex outgo on imports of coking coal, a key steel-making input.

While Rashtriya Ispat Nigam Ltd depends entirely on coking coal imports to meet its demand, SAIL imports 75 per cent of its needs from abroad.

The country’s steel sector imports about 30 mt coking coal now and with the rising capacity, the demand for the key input is expected to rise further in the coming days.

Poland has around 16.9 billion tonnes hard coal reserves, mainly located in Upper Silesia and in Lublin basin. Nearly 44 per cent of the reserves is coking coal. The Central European nation was the tenth largest coking coal producer in 2012, according to World Coal Association data.

ICVL enjoys autonomy accorded to Navratna firms without having the formal status. Its Board is empowered to take calls on investments of up to Rs 1,500 crore and beyond that, it needs assent of a higher authority.

Formed in 2009, ICVL initially had members such as SAIL, NTPC, CIL, RINL, NMDC. NTPC, however, decided to opt out of the consortium as it was seeking thermal coal blocks, while other members were keen on coking coal.

“Given the size of the Poland mine, it has been decided to rope in a partner for the domestic steel industry,” the source said, without naming the proposed partner.

The intent to buy the asset comes at a time when the price of coking coal has slipped to $130-132 per tonne from its peak of $350 a tonne two years back, the source said.

With the price of the raw material on the wane, asset prices have also come down internationally, he added.

The cost of the mine acquisition would be around Rs 3,500 crore, the source stated, adding that it generally costs $1 million to acquire a mine having one MT reserve.

ICVL since its inception about four years ago came close to buying foreign assets on different occasions but has so far failed to seal a deal.

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