KOLKATA (miningweekly.com) - India and Poland are likely to start bilateral talks later this month to facilitate the acquisition by Indian government-owned companies of high-grade coking coal assets in the East European country.
Indian Steel Minister Beni Prasad Verma would take a three-day official tour of Poland starting September 30, accompanied by senior officials of the Ministry and government-owned steel producing companies, during which a memorandum of understanding was expected to be signed on coal asset acquisition.
The groundwork for the visit was laid in a meeting between Verma and the Polish Ambassador in India, Piotr Kłodkowski, last week.
The Polish government had taken a policy initiative to open its coal assets for foreign investment, and India’s planned coking coal asset acquisition in that country was expected to be spearheaded by International Coal Ventures Limited (ICVL), a special purpose vehicle (SPV) floated exclusively for the purpose.
ICVL was floated in 2009 by the country’s largest steel producer, Steel Authority of India Limited, Coal India Limited (CIL), the largest miner, and steel producer Rashtriya Ispat Nigam Limited, all owned and managed by the Indian government.
The SPV which, to date, had been unsuccessful in clinching any overseas asset acquisitions, was banking on marking its maiden overseas footprint, on the back of new India-Poland bilateral collaboration initiatives, officials in the Steel Ministry said.
According to preliminary discussions held between the two governments, Indian companies would be seeking a stake in coking coal reserves of about 500-million tonnes by 2019, which could be noncontiguous from Poland’s total estimated coal reserves of 17-billion tonnes.
At present, India’s steel production growth plans were hamstrung by a shortage of domestic coking coal and high dependency on imports. Current domestic demand for coking coal by steel producers was estimated at between 60-million and 65-million tonnes a year - half of which was met through imports.
Australia accounted for over 84% of India's coking coal imports, followed by Indonesia at 10.36% and New Zealand at 3.45%. India’s sole coking coal producer, Bharat Coking Coal Company Limited, a wholly owned subsidiary of CIL produced around 30-million tonnes a year.
According to a Steel Ministry estimate, coking coal demand would rise to 94-million tonnes a year by 2016, and 200-million tonnes a year by 2025, if the country were to achieve its steel production target of 200-million tonnes a year.