CIL may strike $200 mn deal for Peabody’s Austra
KOLKATA: The world’s largest miner, Coal India Ltd (CIL), is in advanced talks to buy stake in Peabody Energy’s Australian asset for less than $200 million.
“The (Peabody) deal is for buying stake at a particular coal mine in Australia and also long term offtake contract,” CIL Chairman Partha S Bhattacharyya told reporters here.
“We are closer to a deal as the pricing difference between us has narrowed. We expect it may lead to a concrete investment decision. The deal will cost less than $200 million,” he said.
Bhattacharyya said, “We have cash balance of `39,000 crore and, so as an energy company, we have to look for quality coal assets to meet the country’s energy demand.”
May miss production target
Meanwhile, CIL may miss its target to produce 460.5 million ton in 2010-11 period. In the six months period between April to September, the company has produced 185.68 million ton against a target of 203.95 million ton.
Bhattacharyya said that the production was hampered mainly due to piling of stock in the pitheads, fire incidents and rains in some mines. But CIL has able to reduce the pithead stock. There was a stock position of 63 million ton coal in April 1, 2010 which has come down to 48 million ton at present.
During this six-month period, production in most of the subsidiaries of CIL have dropped. “Despite that I am hopeful that BCCL and SECL will be able to exceed their target at the end of this fiscal,” he said.
He also pointed out that 17 new projects from where CIL expected to get a good amount of coal, failed to produce considerably as some of the projects did not get clearance from the Union Environment Department.
The demand for coal in the country has been growing at 9 to 10 per cent per annum.
To supply better quality coal, CIL has already decided to set up another 20 non-coking and coking coal washeries under Build, Operate and Maintain (BOM) scheme and turnkey scheme. In the current fiscal, it would order setting up two more washeries.
Meanwhile, CIL has reported a net profit of `4,020 crore during the April-September period this year. It was `3,115 crore in the corresponding period last year. Net sales stood at `22,525.53 crore (`19,269.52 crore), a rise of 16.9 per cent.