KOLKATA (miningweekly.com) - India’s International Coal Ventures Limited (ICVL) has teamed up with Rail India Technical Economic Services (RITES) to back its overseas coal asset acquisition plans by offering mining logistics and evacuation services to host countries.

ICVL’s collaboration with a railway technical services and consultancy firm stemmed from the company’s strategic concern that in several target countries, such as Indonesia and Mozambique, successful mine acquisitions would need to be backed by infrastructural and logistics investments to ensure optimal management and evacuation of extracted minerals from pitheads to consumption centers, both domestically and overseas.

ICVL is a special purpose vehicle (SPV) floated by India’s largest steel producers Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited, along with the country’s largest iron-ore miner NMDC Limited, to exclusively focus on buying coal assets overseas.

RITES, in turn, is a subsidiary of Indian government-owned and operated Indian Railways, which offers consultancy services related to infrastructure and transportation technologies.

According to a senior ICVL official, this was the best time to acquire coal assets and several good deals were on offer. However, the official noted that Indian miners' past experiences had shown that apart from mining operations, investments and technology related to infrastructure and logistics were critical in the host countries if primary investments in mining were to be successful.

He cited the example of a SAIL-RITES collaboration in a domestic market to construct a railway wagon building plant. Similar offset projects needed to be put on offer from the Indian side to make acquisition deals attractive to the host countries.

ICVL has identified five coal assets - in Indonesia, Mozambique and the US - and had signed nondisclosure agreements with the asset owners as a prequel to conducting due diligence of the coal mines. In the US, the Southern Coal Corporation has offered the Indian consortium an equity stake in three of its operating mines.

A joint team of ICVL and RITES would be visiting Indonesia to conduct a survey of the identified coal mines, and to appraise infrastructure and logistics investment requirements in which RITES could offer its service, the official said.

To date, ICVL, which was formed in 2009, has failed to an overseas deal.

One of its founding constituent’s, NTPC Limited, the largest domestic power producer, earlier this year pulled out of the SPV on the grounds that while its other constituent's priority was to secure coking coal assets, as a thermal power producer, NTPC’s focus was on thermal grade coal and it, therefore, decided to go it alone for its overseas ventures.