Coal India turns to foreign firms for mines
Mon Jun 02 12:29:59 UTC 2008
By Arpan Mukherjee
MUMBAI (Reuters) - State-run Coal India will invite foreign firms to develop domestic mines and is eyeing assets in Canada, Africa and Australia to meet the energy needs of the country, the firm's chairman said.
Coal accounts for 55 percent of the energy used in India, which as Asia's third-largest oil consumer is seeing its oil import bill boom, and demand for fuels is rising fast in an economy that is expanding by 9 percent a year.
"With the unprecedented rise in oil prices, coal will assume further importance," Coal India Chairman Partha Sarathi Bhattacharyya told Reuters on Monday.
He said India's coal imports in the current fiscal year to March 2009 would rise 10 percent to about 50 million tonnes.
Coal India, the country's largest coal producer, plans to spend 40 billion rupees ($945 million) to develop seven underground mines estimated to have 400 million tonnes of coal.
While the state-run firm would invest the money, the mines would be developed and operated by foreign firms, he said.
The company also wants to form joint ventures to revive 121 mines that were abandoned in the past as it did not then have the technology to safely and efficiently operate them, Bhattacharyya said.
He said companies, including steel makers and power producers, would be keen to invest in these mines as they had vast reserves of both coking and thermal coal.
"As long as the mine is viable, investment is not a problem," he said.
India has a shortage of coking coal needed by steel firms and prices have risen sharply this year.
Record oil prices and surging demand lifted benchmark spot Australian thermal coal prices to above $138 a tonne last week, just short of an all-time peak.
Coal India is also eyeing assets in Indonesia, South Africa, Mozambique, Australia and Canada, Bhattacharyya said.
Coal India, which produced 83 percent of the country's coal in 2007/08, is expected to increase its production by 45.5 million tonne to 425 million tonnes in 2008/09.
It had earlier estimated production at 405 million tonnes in 2008/09, from 379.5 million tonnes in 2007/08.
"It is a tall order and 425 million tonnes production is certainly tough," Bhattacharyya said.
The company expects to supply 447 million tonne in 2008/09, bridging the gap from its 47-million tonne reserve, he said.
This will help meet growing demand, especially from power plants, some of which have stocks of between 10-14 days instead of the normal three weeks.
India, which has an estimated coal reserve of 276 billion tonne, relies on imports to meet its shortfall.
(For summit blog: summitnotebook.reuters.com)
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