CIL board says no to Adani JV proposal; stock up

KOLKATA: Coal India has shot down Adani Group's proposal to form a joint venture for exploiting the group's newly-acquired coal mines in Australia. The proposal was turned down on the ground that CIL cannot enter into joint ventures on a single proposal basis from a private company; it has to be through the expression of interest mode, a Coal India official, who did not want to be identified, said.

At 10:13 am, shares of Coal India were trading 1.05% up at Rs 412.75 on the Bombay Stock Exchange.

He said the Adani Group's proposal was discussed at the last board meeting held a few days ago. "Being a public sector unit, such joint venture proposals are not in adherence to our policy and we cannot pursue them," he said. Adani Enterprises had bought a coal mine at Galilee coal tenement in Australia's Queensland in August last year at $ 3.2 billion from Linc Energy Ltd. It was one of the largest acquisitions by an Indian company in Australia. Later the Adani group committed an investment of $6.8 billion in the mine. It is targeting coal production by 2014 and production of 50-60 million tonnes by 2022.

"The Adani group approached Coal India possibly because of its expertise in coal mining and also because we are looking at acquisitions of foreign assets. Although Coal India had invited expression of interest for taking stakes in foreign assets the Adani group did not respond because it did not have the Australian asset by then," a CIL official said. CIL had earlier received a JV proposal from ArcelorMittal for extracting residual coal from mines that were abandoned.