Coal India’s efforts to acquire a mid-sized virgin thermal coal block from a private party in Australia have drawn a blank.

The effort was made parallel to the company’s exercise to enter into strategic partnership with global majors through the tendering process.

A total of 52 companies from Australia, the US, South Africa and Indonesia had in September submitted expressions of interest to form a strategic alliance with CIL.

According to sources, CIL withdrew from the race for acquisition of the coal asset in Australia following the due diligence carried out in September-October. A source told Business Line that “The asset quality proved much below our expectations.”

On the inclusion of ‘strategic partner,’ the source said the evaluation of the EoIs had begun and the short listed companies would be invited to make presentations before CIL by end November. The company has identified 45 of the 52 EoIs as sound.

According to him, the Indian coal major is interested in overseas partnerships in three broad areas long term agreement to import coal at a cheaper price than the existing landed cost of contracted coal; equity participation in producing assets to get coal on a cost plus basis and; forming equity joint ventures with overseas majors.

Mr Partha S Bhattacharyya chairman of CIL has previously said that the company is interested in investing anything between INR 5000 to INR 7500 crore through the strategic partners. The company has a free cash reserve of INR 20000 crore.

(Sourced from Business Line)