Coal news and updates

State-run Coal India LtdBSE -0.97 % (CIL) is exploring possibilities to own coalmines in Botswana that has one of the largest coal resources in the African continent.

 

CILis looking at a government-to-government arrangement in Botswana wherein the coal monopoly will acquire, develop and operate coal blocks and import the produce to India, a senior coal ministry official said.

 

The partnership is proposed to be on the lines of CIL's bilateral partnership with Mozambique as per which the company secured two blocks in Tete province with reserves exceeding a billion tonne.

 

"CIL is exploring a government-to-government deal. It is quite interested in owning coal blocks in Botswana that has about 200 billion tonnes of coal reserves," the official said.

 

CIL chairman S Narsing Rao did not offer any comments on the development. The company has set up a Rs 6,000 crore fund for overseas acquisitions.

 

The coal ministry official said CIL would approach the Botswana government for a deal. "However, the company needs to ensure adequate infrastructure availability for exports from Botswana as it is a landlocked country," the coal ministry official said.

 

Earlier this year, the African country had evinced interest in exporting coal to energy- starved nations like India, which presently bank on traditional suppliers like Indonesia and Australia.

 

Botswana is also building to railway links to connect to the ports of Walvis Bay in Namibia to the west or Techobanine in Mozambique to the east.

 

Dipesh Dipu, partner at Jenisse Management Consultants, said Botswana was being a considered as an investment opportunity by many countries as it has one of the largest coal reserves in Africa.

 

"The only concern is that country is landlocked. Distance to both the East Coast and the West Coast from Botswana is likely to be in excess of 1500 kms. Moreover there is no rail network at present. If such infrastructure is made available, it is definitely a good proposition," he said.

 

A senior CIL official said the company was also looking at coal properties in Australia and has signed three non-disclosure agreements. "We are looking at acquiring assets in Australia since it is a comparatively stable nation for investment," he said.

 

 

Source: The Economic Times