International Coal Ventures Ltd (ICVL), a consortium of five state-run companies, has submitted a final bid for the acquisition of 12 per cent equity in the Grosvenor Coking Coal Mine of mining major Anglo American located in the Bowen Basin in Australia.
The asset has a large reserve of prime hard coking coal from which an output of about 4 million tonnes of coking coal per annum is expected. Industry sources said that both the companies were planning to meet for strategic discussions soon. Steel Authority of India (SAIL), which is a major shareholder in ICVL, is expected to get around 70 per cent of the output from the mine for its own consumption. According to sources, ICVL is also going to begin a detailed due diligence exercise in the US and Russia for prime hard coking coal assets. If the assets are found suitable, the consortium is planning to develop 50:50 joint ventures between the owners of the assets and ICVL.
The consortium, however, is likely to push for exclusive rights to the entire output from these mines. The main two consumers of coking coal in ICVL are SAIL and RINL. Almost 70 per cent of the country's requirement for coking coal, a vital input in steel production, is met through imports from Australia, Indonesia and the US. Coking coal requirement for steel production is expected to be 85.34 million tonnes in 2011-12, according to the Steel Ministry.
ICVL, comprising SAIL, CIL, RINL NMDC, and NTPC, is headed by the SAIL Chairman, Mr C.S. Verma. The ICVL Board has been mandated by the Government to make investments of up to $300 million for securing metallurgical coal and thermal overseas coal assets.
Proposals exceeding the amount are sent to the Empowered Committee of Secretaries for directly seeking approval of the Cabinet.