CIL may buy stake in Peabody's Oz assets

NEW DELHI: Coal India Ltd, the world’s largest coal producer, may buy up to a 15% stake in US-based Peabody Energy Corp’s Australian assets early next fiscal for an estimated $100 million (about Rs 450 crore). “It (deal) should not take too long a time. It should be two to three months. We are in the final stages of talks with Peabody Energy for a 15% stake for $100 million,” an official privy to the development, who did not wish to be named said.

More or less an agreement has been reached on the valuation, the official said, adding, “We will invest in equity and in return, we will get the right for coal offtake.”

CIL chairman P S Bhattacharyya , however, refused to comment on the issue. The proposal to buy a stake in Peabody’s asset will be deliberated at a meeting of a sub-committee of the company board on the state-owned firm’s foreign acquisition plans, which is likely to take place this month.

“The proposal is likely to be cleared in the board’s sub-committee meeting on foreign acquisitions , which is likely this month,” another person in-theknow of the matter said.

Peabody Energy is the world’s largest private sector coal company , with sales of 246 MT in 2010. The company claims to have 9 billion tonnes of reserves and manages and owns interest in 28 mining operations in the US and Australia.