India mulls buying South African coal assets
India-owned coal producer, Coal India Limited (CIL), may soon buy a few assets in South Africa, as the Asian country is working out details to open up the nationalized sector and allow private companies to mine and sell the commodity.
The moves comes as New Delhi, which wants to triple the country’s steel capacity to 300 million tonnes by 2025, does not have enough reserves of coking or steelmaking coal to support such expansion, Reuters reports.
“There are present negotiations with people in South Africa,” Coal Secretary Anil Swarup was quoted as saying. “We imported around 80-90 million tonnes of coking coal last (fiscal) year and if that is the amount that can come through a mine owned by Coal India, it would consider it.”
India is the world’s third-largest producer of coal, behind China and the U.S. Yet it relies heavily on imports because of mismanagement and an onerous bureaucracy in coal exploration, production and power generation. As a result, nearly a quarter of India’s 1.2 billion people have no electricity, according to the World Bank.
That is why the government has set as a new goal to boost local production and so stop imports of coal used to generate power in three years.
Last week, local press reported that CIL — the world’s largest coal producer by output— would also consider forming a joint venture or signing bilateral arrangements.