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Singareni looks for coal assets abroad

State miner Singareni Collieries Company has expressed its interest in acquisition of thermal coal assets in Australia, Indonesia, South Africa and Mozambique.

The company is keen on acquiring overseas assets as the demand for coal is rising and such an arrangement would secure supplies. It is open to forming joint ventures, acquire equity stake, ownership interest, outright purchase in coal companies, mines, assets or blocks, whether greenfield or brownfield projects, in coal rich countries.

It is looking at picking up 51 per cent stake in assets whose production capacity is not less than two mpta for each mine and reserves not less than 50 million tonne.

Before purchasing an asset, the company would carry out due diligence by engaging independent consultants- technical, financial, legal and others -on the short-listed bidders. The company has its reserves spread across 350 km in four districts of Telangana and is a major supplier of coal to power plants, cement, steel and other consumers within the state and outside as well.

The coal producer, which has drawn up plans to increase its coal production from 52 million tonne to 80 million tonne in four years, is willing to put in upto Rs 500 crore or more for overseas assets. It was looking to add about five million tonne from the international mines to supplement its supplies.

SCCL chairman and managing director N Sridhar had said with coal prices falling globally, it was right time for it to consider acquiring offshore mines Globally the commodity prices were falling and many companies were exiting or selling their assets and it would be prudent to buy assets when the prices were low, he added.

For the financial year 2014-15, SCCL produced 52.5 million tonne coal, up four per cent from 50.47 million tonne in the previous year. Its gross turnover for the fiscal was Rs 14,083 crore, its highest ever, and an increase of 19 per cent over last year’s Rs 11,870 crore.

source: http://www.mydigitalfc.com