KOLKATA (miningweekly.com) – India’s Coal India Limited (CIL) has received five proposals to acquire coal assets in Indonesia.

The miner was currently examining the proposals with a view to starting negotiations with the asset owners in Indonesia, along with a due diligence process, an official in the Coal Ministry said, declining to identify the assets or a timeline for completion of the acquisitions.

In September this year, CIL floated a notice inviting proposals for coal assets overseas. This was the first time that the government, which is the principal shareholder in the company, had officially disclosed the response and that it was primarily Indonesian assets on offer.

Coal Minister Sriprakash Jaiswal said that CIL would have to act more aggressively to acquire coal assets overseas as part of the country’s medium-term strategy to overcome the acute shortage of fuel from domestic sources.

The coal demand-supply gap has been pegged at 135-million tonnes in 2012/13, and was projected to rise to 185-million tonnes by 2015/16.

CIL had earmarked capital investments to the tune of $4-billion during the country’s twelfth Five Year Plan (2012 to 2017) during which the miner would take up 126 new projects within the country. According to CIL, of the total projects taken up, 60 have been scheduled for completion by 2017 or the terminal year of the Plan period, yielding incremental coal production of 88-million tonnes.

Considering that even with the incremental production from new projects a substantial demand-supply gap would continue, and that this would result in import dependency, the Coal Ministry has been advising the miner to undertake investments overseas, the official said.

As a result, CIL has set aside a corpus estimated at $5.7-million for overseas investments, including development of a coal block in the Tete province of Mozambique.

Apart from acquiring interests in coal blocks in Mozambique, CIL’s record in concluding investment deals abroad has been tardy despite having a considerable corpus in hand.

CIL was still awaiting a formal response from the provincial government of Limpopo, in South Africa, for the joint development of coal blocks, despite having signed an agreement with the provincial government regarding collaboration in the coal sector in the province.