Coal India Ltd – World’s Largest Coal Producer to Diversify, Major Acquisition on the Way

Coal India Ltd. (CIL) world’s largest coal producers, is on the lookout for shareholders’ approval to modify its memorandum of association (MoA) in order to get into the business producing fertilizers and chemicals using coal gas.

Two proposed joint ventures with Gail Ltd and Rashtriya Chemicals and Fertilizers Ltd (RCF) are aimed at resuscitating the Talcher unit of another state-run firm, Fertilizer Corp. of India, which ceased operations back in 1999.

Two proposed joint ventures with Gail Ltd and Rashtriya Chemicals and Fertilizers Ltd (RCF) are aimed at resuscitating the Talcher unit of another state-run firm, Fertilizer Corp. of India, which ceased operations back in 1999.

In a filing to Bombay Stock Exchange (BSE), the company said that the amendment will allow CIL to “To produce, process, store, distribute, sell, import, export or otherwise deal in gas and other by-products arising from the coal gasification process in India and abroad and use products or by-products of gasification process of to produce ammonium nitrate, fertilizers and associated products, and for this purpose, to install, operate and manage all necessary plants, mines, establishments and works, in India and abroad”.

In 2009, the Ministry of Chemicals and Fertilizers settled on to making Gail Ltd, Rashtriya Chemicals and Fertilizers Ltd and CIL to form a consortium by signing an agreement for setting up a surface coal gasification plant for chemicals and fertilizers at Talcher. In August 2013, the government proposed two joint ventures for operating the proposed project.

JV to Facilitate Fertilizers and Chemicals Business

The amendment will facilitate CIL to set up and operate coal-gasification plants in India as well as locations abroad.

The proposal has been recently approved by CIL board. A postal ballot will take place to seek shareholders’ nod on the issue.

Two joint ventures – one for coal gasification and gas purification with GAIL and the other for setting up a downstream fertilizer-cum-ammonium nitrate unit.

The company said that Rashtriya Chemicals & Fertilizers had signed a memorandum of understand with GAIL (India) to work in co-operation and explore the potential use of byproducts from surface coal gas project in the fertilizer industry. GAIL approached CIL with a proposal to work together in the project development part for surface coal-gasification in coal-bearing states in India.

A possibility of a new urea-ammonium nitrate project is much likely at the non-operational fertilizer plant of FCI at Talcher.

CIL to Diversify Overseas

Coal India Ltd is also seeking consultant’s assistance to help evaluate overseas coal assets. The company has set its eyes on to either develop a new mine, or buy equity in an operational venture, to bring coking coal—used to make steel—and thermal coal for power plants back to the country. CIL has cash reserves of around $10.5 billion (620 billion rupees).

The world’s largest coal miner bough coal blocks in Mozambique in 2009. Its recent attempts at partnerships fell through including those in Indonesia, Australia, the U.S. including Peabody Energy. Currently, Australia and Indonesia are two feasible regions where the company might make some major acquisitions. However, the company will have to first get a nod from the government which is its biggest shareholder.

The newly elected Prime Minister Narendra Modi is reportedly considering breaking up Coal India and open up the coal sector to foreign players.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Porsche’s Taycan EV outsells ICE powered its 911 sports car

Porsche’s Taycan EV outsells ICE powered its 911 sports car

The Porsche Taycan EV has outsold the Porsche 911 sports car for the first time since it was introduced in 2019 by the German automaker.
21 hours ago
Tesla expected to make a killing in Bitcoin profits in next earning report

Tesla expected to make a killing in Bitcoin profits in next earning report

The price of Bitcoins has rallied to another high in October after hitting around $64,800 in April. This time it has hit over $58,000 on Oct. 14.
2 days ago
Tesla Cybertruck V/s Rivian’s R1T

Tesla Cybertruck V/s Rivian’s R1T

The Tesla Cyberturck left many disappointed with its alien space ship-like design; though both trucks are still under production, what matters most is what comes under the hood.
3 days ago
College sports is multibillion dollar industry in the US

College sports is multibillion dollar industry in the US

According to data analyzed by GOBankingRates, head football coaches, closely followed by basketball coaches, easily rack up seven-figure salaries in the US.
4 days ago
Top women influencers in finance and wealth management

Top women influencers in finance and wealth management

It is only in the last century or so that women have been publicly acknowledged for their roles as leaders in various fields. Here’s a list of women influencers by Industry Leade
5 days ago
Brian Goldner, who led Hasbro’s transformation into an entertainment giant, passes away at 58

Brian Goldner, who led Hasbro’s transformation into an entertainment giant, passes away at 58

Brian Goldner, the CEO and Chairman of toymaker Hasbro, has died at age 58, the company said Tuesday (Oct. 12).
1 week ago