India moots coal fund

THE Indian government is proposing to create a sovereign wealth-type fund to buy overseas coal assets.
India moots coal fund India moots coal fund India moots coal fund India moots coal fund India moots coal fund

Shri Sriprakash Jaiswal

Noel Dyson

For some time the Indian government has been encouraging private and public entities to buy coal assets abroad and now it is prepared to put some skin into the game.

Indian Coal Minister Shri Sriprakash Jaiswal told a Confederation of Indian Industry round table that acquisition of coal properties abroad had become more important in light of domestic production constraints and the growing demand for coal from different consuming sectors, particularly steel and power.

“We are facing tough challenges in meeting the energy needs of the country,” he said.

“The nation’s energy requirements are envisaged to increase to about 1677 to 2077 million tonnes by 2031-32 as per the projects made in the Integrated Energy Policy Committee report.

“The overall import dependence of energy in 2031-32 is projected to be in the range of 58 to 67 per cent.

“This kind of growth in energy demand and the increasing gap between domestic supply and demand will make it imperative to secure energy supplies through imports.”

The Indian government has been encouraging both public and private sector companies to buy energy assets abroad.

Coal India has been one of the key players in this area, pursuing foreign ventures through its Coal Videsh division.

The US, Australia, South Africa, Mozambique and Indonesia have been prioritised by Coal India for acquiring mining assets based on a combination of factors, including such things as good quality coal resources, infrastructure and favourable foreign direct investment.

Coal India has been awarded two blocks in Mozambique which boast more than 1 billion tonnes of coal reserves.

Action has been initiated for the development and exploration of the blocks.

The company also floated a global expression of interest to select strategic partners in the US, Australia, South Africa and Indonesia.

Jaiswal said the Indian government would have to become faster on its feet if it wanted to compete with other energy-deficient countries that were rapidly buying coal assets abroad.

He said it included fast-tracking the decision making process and creating a policy support framework to overcome risk aversion.

Jaiswal said the government would look to partner with other companies to develop greenfield assets and projects.

In other Indian news, there have been reports of six people killed and two seriously injured when an illegal coal mine at the Chingi Tola area of Madhya Pradesh’s Singrauli district caved in.

According to initial reports, about 14 people were illegally mining at the site at the time of mishap and eight people had been rescued alive.

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