Slideshow image
Mfg. of Water well Drilling Rigs, Dth Hammers and Button Bits...
Water Well Drilling Rigs, Dth Drilling Rigs, Rotary Drilling Rigs...
Blast hole Drills, Water Well Drilling Rig, Mud Pumps, Vertical Turbine Pumps...
klrsai deepagetechjcr

Coal India may pay 30% less for Peabody asset stake on lower valuation

Coal India may pay 30% less for Peabody asset stake on lower valuation Coal India Ltd has scaled down the estimated cost of proposed acquisition of participatory stake in Peabody Energy's Australian coal assets by over 30 per cent.

Company sources told Business line that the valuation of the identified asset which was earlier considered as $1 billion is now pegged at $600-700 million.

“The ongoing negotiations have narrowed (scaled) down the valuation of the asset to $600-700 million from as high as $1 billion,” the source said.

In effect, the cost of acquisition which was previously referred to be less than $200 million is now expected to be reduced further.

The CIL Chairman, Mr Partha S. Bhattacharyya, has gone on record saying that the company was in “striking distance” of acquiring interest in a particular mine of Peabody in Australia and striking a long term offtake agreement with the American miner as well. The acquisition will help CIL to ship equity coal to India.
“There seems to be a closer meeting of minds with regard to our discussion for Australian asset (of Peabody). It may lead to concrete end in the near future,” Mr Bhattacharyya had said in a press conference in end-November. Headquartered in St Louis in Missouri, US, Peabody sold 244 million tonne of coal clocking revenue of $6 billion in 2009. According to the company's Web site, Peabody fuels 10 per cent of US electricity generation. The stock is listed on the NYSE.

Apart from Peabody, CIL is also in discussion with a few other companies in the US, South Africa and Indonesia for similar deals.

Equipment purchase
As part of its ongoing modernisation drive, the CIL board has approved the company's proposal to purchase 16 dumpers of 240 tonne each from Bucyrus, US, at a total consideration of Rs 524 crore. The contract includes supplying spares as well maintenance of the dumpers for 11 years.

At the November 22 meeting, the board had approved purchase of other heavy earthmoving equipment worth Rs 400 crore for the open cast mining projects.

Drilling Today Contact