Coal India Limited is getting ready to invest $100 million in return for 15 percent of a a joint venture in Australia. The 85 percent owner of the JV will be the world’s largest private sector coal company, Peabody headquartered in St Louis, Missouri, not far from where I attended business school.
The object of desire is the Wilkie Creek coal mine, in Queensland, Australia, which has an estimated coal reserve of 400 million tonnes. It is located in the Surat Basin of southeast Queensland and produces 2.35 million tonnes of low-sulphur, low-nitrogen thermal coal annually.
Coal India, which had its initial public offering in 2010, touched a 52-week high, with the share shooting up 2.37% in early trade. By the end of day, the stock had jumped 3.25%, in a market that was otherwise subdued. The rally helped Coal India surpass another state-run Indian energy giant, ONGC (Oil & Natural Gas Corporation), in terms of market capitalization.
What this means:
India’s burgeoning energy demands are sending companies, government owned and private, in the search for resources worldwide. Note that Indian companies made investments in shale gas and coal mines in the Eastern USA last year.
