Sasol, Tata seeking India coal fields for oil

JOHANNESBURG, May 29 (Reuters) - South Africa's Sasol (SOLJ.J: Quote, Profile, Research), the world's biggest maker of motor fuel from coal, said on Thursday it was working jointly with India's Tata Group to acquire coal fields for coal-to-liquid ventures.

"Sasol and Tata are collaborating with the Indian government on the allocation of coal blocks for CTL (coal-to-liquid) projects," Johann van Rheede, Sasol's spokesman told Reuters.

He said the company still has long-term plans to develop coal-to-liquids fuels projects in India though it was still "early days".

Sasol also has similar nascent plans in China, the world's biggest producer and consumer of coal.

Countries around the world are waking up to the reality of high oil prices, and seeking alternative sources of energy.

India's Telegraph newspaper quoted officials saying India's government had identified three coal blocks for the Tata project to produce diesel from coal jointly with Sasol.

An Indian consultancy firm has zeroed in on three blocks in the eastern state of Orissa's Talcher valley -- Srirampur, Radhikapur and Ramachandi -- which have 8.5 billion tonnes of coal reserves.

But officials plan to give one block for the Tata and Sasol pilot project as the coal requirement for the venture is much lower at 1.5 billion tonnes.

Indian officials said Tata was expected to invest about $6-7 billion in the project and would require around 1.5 billion tonnes of coal over a 40-year period, the paper said.