International Coal Ventures Ltd (ICVL), a consortium of five leading steel and mining PSUs, is looking to buy coking coal assets in the US, a senior company official said today.
"We are going to see some coal assets. The coal prices are falling, market capitalisation of the coal firms have fallen like anything... Today the valuations are 35 to 40 per cent lower," SAIL Chairman C S Verma, who is also heading ICVL, told reporters here.
Verma, who is leaving for the US tomorrow with Steel Secretary to review the potential targets, said that ICVL is looking at one or two coal assets, particularly in Virginia.
"We are having both the options open - outright purchase and joint venture. We will see and at least try to arrive at a level where we can take a decision. Only 1 or 2 coal assets we are looking at, basically in Virginia," he said.
Verma, however, declined to name the potential targets.
ICVL is a venture of five state-run companies – Coal India, Steel Authority of India (SAIL), Rashtriya Ispat Nigam (RINL), NMDC and NTPC with the mandate of securing overseas coal assets.
It has set a target of owning 500 million tonnes of coal reserves by 2019-2020, though it has not been able to strike a single deal since inception. On a couple of occasions, it came close to acquiring assets but retreated after discords crept in and consensus took longer than expected.
When asked about ICVL's failure in acquiring assets till date, Verma said that " I think it was a blessing in disguise that we did not buy anything 6 months back. Today, the valuations are 35-40 per cent lower."
The rejig plan of the venture has also been under consideration of the government as two promoters, Coal India and NTPC -- with 28 and 14 per cent stake respectively—are looking to quit ICVL. However, a formal decision has not yet been taken.