Bloomberg reported that Coal India Ltd facing a drop in output for the first time in more than a decade, is accelerating its search for overseas assets after talks with Massey Energy Co and Peabody Energy Corp failed.

Mr NC Jha chairman of CIL in an interview said that delays in land acquisitions and environmental clearances to develop projects have hindered efforts by the world’s biggest producer of the fuel to boost production. The government last month allowed state run Coal India, which has USD 9.1 billion of cash, to buy unlisted overseas companies.

Mr Jha said that “The government approval allows us to move faster. We have to try every possible option including acquisitions to meet supply commitments. We’re still struggling to meet our production targets.”

Production at Coal India, which mines more than 80% of the country’s coal, dropped by 5% in the first six months of the year because of heavy rains and a one day strike. Should full year production decline, it would be the company’s first since at least 1998.

Mr Prasad Baji an analyst at Edelweiss Capital Ltd in Mumbai said that “The kind of cash Coal India has, it makes every sense to look for acquisitions. Although we have enough resources in the country, we still need to look outside because of some fundamental problems.”

(Sourced from Bloomberg)