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Indian Consortium Covets BHP Coal Assets
International Energy Network News: The chairman of an Indian consortium said that International Coal, a joint venture of five Indian state-owned metals and energy companies, may participate in the bidding for BHP Billiton's coal exploration rights in South Africa.In early February, BHP Billiton made a preliminary offer for undeveloped coal exploration rights in its wholly-owned subsidiary in South Africa. The subsidiary is located in the Mpumalanga region and supplies thermal coal to the local and global coal markets.
India is short of energy. In order to alleviate the shortage of power supply in some local cement plants and steel plants under construction, India decided to purchase overseas coal mines. India's power companies and steelmakers are also looking to acquire thermal coal assets and coking coal assets respectively. Every year, steelmakers import 30 to 32 million tons of coking coal from overseas, mainly from Australia.
An advertisement in the Economic Times of India stated that BHP Billiton South Africa is inviting coal exploration, mining and development companies to join its bidding process to sell all interests and prospecting rights in parts of South Africa.
In January 2011, India's Coal Minister Sriprakash Jaiswal said that in order to ensure energy security issues on a global scale in the face of competition from countries such as China, the country was formulating a policy that would allow state-owned companies to operate with shorter Time to acquire overseas coal assets.
Coal India's mismanagement has led to undersupply in the country's power sector. Indian Environment Minister Jairam Ramesh will point out several major problems that have led to India's severe shortage of coal production in recent years and how these problems will affect the power shortage.
Information released by the Indian Coal Department shows that in some areas, some public sector coal giants have been illegally mined beyond their quota.
The data also shows that in other related incidents, Coal India also suffered from serious management inefficiencies. For example, India's CIL has the right to mine 10 million tons of coal per year in the Bhubneswari coal mine, but the mine produces only 40,000 tons of coal per year. In a similar incident, Hingula Coal Mine produces 8.8 million tons of coal every year, but as much as 12 million tons are mined.
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