Pratim Ranjan Bose

Kolkata. Jan. 18

Coal India Ltd plans to go to its board this month with specific “strategic partnership” proposals underlining overseas coal-offtake agreements and equity joint ventures with international majors.

Following the board approval, it will appoint merchant banker to conduct the due diligence.

However, following the due diligence, CIL will have to come back to the board again with specific proposals so as to seek the approval of the Empowered Committee of Secretaries to firm up the deals.

Global cos

While the details of the proposals to be placed before the board are not known, sources said that a total of eight international companies with assets in the US, South Africa, Australia and Indonesia turned up with business proposals during a meeting in Kolkata in mid-December.

The companies are: Peabody, Massey Energy, Murray Energy, Foresight, Coal and Oil- Kideco, Nobel, Harvest Indo and Trishakti.

All the companies were shortlisted through a previously held EoI (expression of interest) round.

“We have received encouraging response from a number of companies. We expect to seek the board approval to conduct the due diligence in this regard, as early as the next board meeting scheduled on January 30,” a company official said.

Rio Tinto and Xstrata opt out

Interestingly, despite seeking more time to come up with proposals, two of the world's largest mining and mineral majors Rio Tinto and Xstrata have finally preferred to opt out of the race to be a strategic partner of CIL.

Both the companies felt that they had nothing to offer in line with CIL's expectations.

(This article was published in the Business Line print edition dated January 19, 2010)
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