An official told Business Standard that coordination with the railways would ensure the crisis situation does not get repeated. The company has drawn up a mine-wise despatch plan with Mahanadi Coalfields, its largest subsidiary, asked to load 76 rakes a day, followed by South Eastern Coalfields, which would load 57 rakes a day.
With this mammoth exercise taking precedence, the company’s move to acquire coking coal assets in Australia has taken a backseat.
In January last year, Coal India had started evaluating options to enter the global mining arena by considering mine buyouts or partnerships with other mining companies
in Latin America, South Africa, Australia, Indonesia and others. By September, it narrowed down on acquiring a 20-25 per cent equity stake in a firm based out of Queensland in Australia and an ad hoc budget of Rs 60 billion was preliminary approved.
It was also close to select a merchant banker from its internal empaneled list as well to take the transaction forward. However, the power situation deteriorated during the time and the proposal for picking up the equity stake in the Australian mining company, which needed the board’s approval, got delayed.
Benchmark coking coal contract pricing forecast for 2018 has been upped to $170 per tonne from the earlier estimate of $150 per tonne
Simultaneously, the Australian company was supposed to revert by January this year with mine condition updates and the proposal on the equity buyout. “We have been mailing them but, so far, they haven’t reverted. We need to visit their mines before any call can be taken,” a Coal India official said.
An expert suggested that since coking coal prices are firming up globally, potential sellers are anticipating better valuation of the assets, which in turn is resulting in delays in signing a procurement agreement. According to US investment bank Seaport Global, the benchmark coking coal contract pricing forecast for 2018 has been upped to $170 per tonne from the earlier estimate of $150 per tonne.
It expects the prices in early 2018 to hover around $220-$230 per tonne.
Estimates suggest that during the ongoing financial year, Indian coking coal imports are likely to increase by over 20 per cent to exceed 50 million tonne (mt) from the previous year’s import of 41.6 mt.
In February 2011, Coal India had tried to pick up a 10 per cent stake in Australian firm Peabody Energy. However, the deal didn’t work out.
In August 2016, too, Coal India had signed a memorandum of understanding with the South African government-controlled African Exploration Mining and Corporation to identify, acquire, explore and develop coal assets. However, the deal got stuck at South Africa’s end.