An Indian coal company is looking to acquire two Australian companies in a deal worth more than $4 billion.
According to reports by the Economic Times, the move would enable state-owned Coal India to import 28 million tonnes of high quality thermal coal a year.
A senior minister of the India’s coal ministry said CIL had sent proposals to acquire majority stakes for $2 billion each in the two companies to the company’s foreign acquisition committee.
"After the committee's clearance, the proposals will be forwarded to the board and CIL will be ready to take them over. The entire process is likely to take at least three months because CIL will conduct a due diligence through its merchant bankers on the assets to make sure the return on investment is in stipulation with the government norms," said the official.
The official did not name the Australian coal miners but said they were large companies that had been in operation for a number of years.
CIL recently received 32 proposals when it floated an expression of interest for acquiring assets from countries including Indonesia, Australia, USA, Mozambique, Chile and Columbia.
"We need to be fast. If we delay the process the assets offered to us may not be available after some time because these companies also have the compulsion of engaging with other parties for selling them," CIL chairman S Narsing Rao had earlier told ET.
Increasing demand for high quality coal and delays in government permits in India is said to be behind the move by CIL.
A recent report highlighted that demand for Australian coal would be increasingly sought by India.
The report states that "India has seen its coal import demands increase annually due to inefficient domestic production.
"Indian conglomerates are increasingly venturing abroad in search of supply assets."