SPV Rs 25,000 crore coal acquisition overseas to meet demand

Hyderabad, Apr 9 (UNI)The Union Cabinet will whet the Rs 25,000 crore Special Purpose Vehicle (SPV) proposed by the five Navaratna undertakings for acquisition of coking coal blocks overseas to meet the demand of power, steel and coal utilities in the country.

Initial plans were for the power major National Thermal Power Corporation (NTPC), Coal Major Coal India Ltd, Mining Navaratna National Mineral Development Corporation (NMDC) and Steel major Steel Authority of India Ltd (SAIL) to pool Rs 1,000 crore each towards equity while Rashtriya Ispat Nigam Ltd (RINL) will put Rs 500 crore.

The consortium will fill'warchest' garnering another 70 per cent debt for providing the necessary muscles for acquisition of coking coal blocks with at least 500 million tonnes reserves, according to RINL Chief Managing Director (CMD) Y S S Rao.

The proposed SPV will be sent to the Union Cabinet for clearance, likely during the year, he told the media here today.

The RINL, alongside the proposed SPV is venturing on its own to acquire coking coal fileds in West Virginia in the US and New South Wales Queensland belt in Australia with a reserve of atleast 50 million tonnes.

Five parties from Australia and three parties from USA had responded to RINL's proposals and the consultants were currently evaluating the coal from the two parties before taking up due diligence. The proposal is likely to be through during the current year.

Though RINL will require three million tonnes of coking coal for its current 3.6 million tonnes steel level which will be up to 12 million tonnes to cope with 20 million tonnes liquid steel to be provided by 2020, the quantum of import will be only ten per cent of its total coal demand.

He said the RINL aid will by next week sign an MoU with NTPC for 50-50 joint venture for installing 150 MW power plant at Visakhapatnam at an estimated outlay of Rs.700 crores.

The power plant will access the 'lean gas' of the blast furnace -III to be commissioned for upgrading RINL's capacity to 8.5 million tonnes by 2009-10.

UNI