KOLKATA (miningweekly.com) – Coal major Coal India Limited (CIL) has received around 60 proposals to acquire equity in overseas coal assets, but the miner and the Indian government are yet to strategise on whether to invest money overseas or to focus on numerous stalled projects at home.

Equity stake offers in coal assets have come in from global majors such as Rio Tinto, Peabody Energy Corporation and India’s own GVK Group. Earlier this week, CIL was also offered coal mining investment opportunities by a representative of the Canadian government in India.

However, as CIL was government owned, it was up to the Coal Ministry to provide direction to CIL on whether or not to look overseas, a Coal Ministry official said.

With large numbers of CIL-owned projects, holding the potential to add substantially to the miner’s total production, currently in a logjam, the miner and the government would have to take a strategic view on their investment priorities considering several managerial and technical constraints of the coal mining company, the official added.

The issue for the new government, which will take charge after the current elections, would be to make a strategic choice between the 60 proposals from abroad and the 241 coal projects at home still awaiting various mandatory approvals, the official said.

According to a note of the Statistics and Progamme Implementation Ministry, as many as 24 expansion and greenfield projects, entailing planned investments of $2-billion, were delayed in 2013 for various reasons, including lack of environment and forest clearances, law and order issues, and land acquisition hold-ups. The projects would add 180-million tonnes a year to CIL’s total coal production capacity.

Coal Ministry officials pointed out that CIL had pruned its production target for the current fiscal year (2014/15) to 507-million tonnes, down from 530-million tonnes set earlier, after having missed its production target over the last two consecutive fiscal periods.

“We have scaled down our production target after having done some calculations on our side and we have held discussions with the Coal Ministry on this,” CIL chairperson S Narsing Rao said.

The Ministry had earlier set a higher target of 530-million tonnes a year for the current year in line with an output goal of 615-million tonnes a year by 2017.

“The target will be possible only when at least two railways lines in the provinces of Jharkhand and Odisha have been implemented. But this has not happened and so, unfortunately, we are not in a position to say that we can achieve the target,” Rao said.

The government and the Coal Ministry, therefore, would have to take this background into consideration when determining how CIL’s investible surplus of around $8-billion could maximise returns in terms of boosting production either at home or abroad, Ministry officials said.

A section within the Ministry and a number of consulted experts were also not certain whether any kind of minority equity participation by CIL in overseas coal assets would ensure long-term energy security for India, while the option of the miner gaining total and exclusive control of foreign coal assets remained a consideration.