India in talks to buy coal mines in SA | Fin24
 
Loading...

India in talks to buy coal mines in SA

Oct 19 2015 21:08

New Delhi - India is talking to South Africa to buy coal mines to feed its expanding steel industry, Coal Secretary Anil Swarup said, adding that New Delhi also hopes to stop imports of coal used to generate power in three years as domestic output jumps.

After years of poor production crippling power supply, state-run Coal India is boosting output at a record pace to meet Prime Minister Narendra Modi's goal of connecting to the grid millions of Indians who still make do with kerosene lamps.

But India, which wants to triple its steel capacity to 300 million tonnes by 2025, does not have enough reserves of coking or steelmaking coal, prompting Coal India to look at assets abroad, Swarup told the Reuters Global Commodities Summit on Monday.

"They are presently in negotiations with people in South Africa," Swarup said.

"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."

Swarup declined to give any investment figure but said money was not an issue for Coal India, which had cash and bank balance of more than $8bn for the year ended March 31.

Overall coal imports into India, the world's third-largest buyer, fell for the third straight month in September in a country used to seeing shiploads coming in as new power plants started.

Coal India's output grew 32 million tonnes to 494.2 million tonnes in the fiscal year 2014/15, the biggest volume rise in its four-decade history.

"In three years we should be able to mine (all the power-generating) coal we require," Swarup said. "The quality of coal that is not available will still be imported."

India is looking to more than double its total coal output to 1.5 billion tonnes by the end of this decade, with 500 million coming from the private sector.

Swarup said India is working out details to open up the nationalised sector and allow private companies to mine and sell coal.

The turnaround in India's coal industry has been a highlight of Modi's tenure in office since May last year, and the prime minister is keen that output grows further.

"He is extremely engaged," Swarup said. "We are reasonably satisfied, though there is still a long way to go."

But environmentalists are worried that the world's third-largest polluter was leading a pan-Asian dash to burn more of the dirty fossil fuel amid international efforts to contain global warming.

india  |  sa economy
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Do you think government can solve the Eskom crisis?

Previous results · Suggest a vote

Loading...