May 14, 2010 / 11:50 AM / 10 years ago

Coal India in mine talks with Massey, Sinar Mas

NEW DELHI (Reuters) - Coal India, the world’s largest coal producer, is in talks with U.S.-based Massey Energy and Indonesia’s Sinar Mas to buy equity in coal mines or form joint ventures for mining, a source involved in the process, said on Friday.

A view of Coal India's Gevra in Chhattisgarh, November 21, 2009. REUTERS/Rupak De Chowdhuri/Files

When asked by Reuters to confirm the names, Coal India Chairman Partha Bhattacharyya said: “no comments.”

“The bankers and technical consultants have been appointed. We are waiting for the results,” Bhattacharyya said.

“We should be able to see a conclusion in the next couple of months,” he said, adding, the state-run firm could select some or all of the current proposals.

Coal India, along with its subsidiaries, mines approximately 80 percent of India’s total coal production which in 2009/10 ended on March 31, was estimated at 532.83 million tonnes.

In a country with a power deficit of 12.5 percent and rapidly growing industries, coal shortage is growing and analysts have estimated imports of over 100 million tonnes by 2012.

Amid local difficulties surrounding issues of rehabilitation of people in mining areas, elaborate regulations and political opposition, Coal India has been forced to look overseas to boost its coal production.

“All five collectively involves an investment of 1.7 billion dollars and we are talking about something like 280 million tonnes of coal (to be produced) over the next 10 years,” Bhattacharyya said from Kolkata.

In April, Bhattacharyya had told reporters that Peabody Energy Corp of the United States was among the companies his state-owned firm was in talks with to buy equity stakes or form mining joint ventures, but had not named the others, citing confidentiality agreements.

Coal India is also set to see an initial public offering this year under which the government plans to off load about 10 percent of its stake and raise about $2.7 billion.

Bhattacharyya said a government cabinet is to approve the plan after which the IPO documents would be filed.

(Reporting by Ruchira Singh; editing by Malini Menon)

For more business news on Reuters Money visit http://www.reutersmoney.in

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