Public sector Coal India Ltd (CIL) is looking at exploration opportunities in countries like Mozambique and Indonesia through its associate company Coal Videsh, a subsidiary formed this year specifically for acquiring coal mines outside the country.

''We are taking two separate routes for our international ventures to bridge the demand-supply gap in the domestic market. One is the government-to-government route and the other the merchant-banking route. We have identified virgin blocks of coal in Mozambique, from which we propose to develop thermal coal. For Indonesia, we have empanelled about 10 merchant bankers,'' Partha Sarathi Bhattacharyya, chairman CIL, said.

CIL, he said, has identified three blocks in Mozambique and is also planning to go to South Africa and Malawi, all in government-to-government ventures. The company is sending a team to Mozambique in August to accelerate the process, he said, adding, the coal available in Mozambique is mostly thermal, besides some coking variety.

''We will acquire coal property abroad through International Coal Ventures Limited (IVCL), a special purpose vehicle formed with other leading state-owned companies to acquire coal assets overseas," Bhattacharyya said.

CIL, meanwhile, is floating global tenders to revive 18 abandoned mines in Jharkhand and West Bengal – against the 26 proposed earlier - in joint ventures with private entities. As per earlier estimate of the 26 mines, 10 had coking coal, while 16 had non-coking coal. 

''These mines have a reserve of about 800 million tonnes of thermal and coking coal," Bhattacharya said, adding, these mines are located at Bharat Coking Coal, Eastern Coalfields and Central Coalfields.

CIL is planning to invest Rs3,200 crore for 2008-09 and will invest Rs1,500-2,000 crore in coal washeries. In future, the company plans to sell only washed coal to improve its price realisation, as washed coal is sold at a 15 per cent to 20 per cent premium to unwashed coal.

In March this year, ArcelorMittal and the Ispat group had expressed interest in reviving these abandoned mines by forming a partnership with CIL through the nomination route. But this was turned down on grounds of safety and economic viability.

CIL now has chosen the EoI (expression of interest) route and also put a stipulation for the JV partner that it must have proven technology for extracting coal from abandoned mines. CIL would determine the broader guidelines of joint venture equity structure and other details depending upon the outcome of the EoIs.

CIL produced 379.69 million tonnes of coal in 2007-08, against 360.61 million tonnes in the previous year and is aiming for a total production of 423.30 million tonnes during the current fiscal. The company posted a pre-tax profit of Rs8,738 crore in 2007-08, against Rs8,622 crore a year ago.

''Coal India supplies almost 46 per cent of the energy requirement of the country at just 35 per cent of the international prices. We have not increased prices except by 10 per cent in December 2007. This translates to an annualised 2.4 per cent increase per annum," Bhattacharya said.

CIL has no option but to sell at this price, as the government wants to keep coal prices, he said. At current below-market prices, CIL is losing out Rs450,000 crore annually, he pointed out.