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Singareni seeks Coal Videsh aid to buy foreign coal assets

Singareni Collieries, India's second-largest state-owned coal miner, sought the assistance of India's largest coal miner Coal India's overseas arm Coal Videsh to buy coal assets in foreign markets. The Hyderabad-headquartered coal firm where Telangana government owns majority stake of 51 per cent, appointed a committee to begin the exercise of shortlisting and due diligence of small to medium-sized global coal assets, preferably in countries like Indonesia.

Singareni's move to look at overseas coal asset buys assumes significance as it comes at a time when sluggish prices have devalued most of the overseas coal blocks up for sale, making acquisitions viable at low valuations. Because of domestic shortage, several Indian companies, mostly privately-owned, bought coal assets for $12 billion in nearly 20 deals over the last decade in countries like Indonesia, South Africa, Australia and United States.

"The advice from Telangana government is to scout for coal assets in countries like Indonesia, Mozambique and Zambia keeping in view coal mining constraints in domestic market and growing demand for power to attract industries," said a top Singareni executive.

Source: The Economic Times