Date:18/01/2005 URL: http://www.thehindubusinessline.com/2005/01/18/stories/2005011801830200.htm

Back CIL board clears plan for new subsidiary

Our Bureau

Kolkata , Jan. 17

THE board of Coal India Ltd (CIL) has approved a proposal relating to the formation of a separate subsidiary to be named Coal Videsh Ltd. The proposed subsidiary is to be incorporated as has been done in the case of ONGC Videsh, subject to the approval of the Union Government.

The proposed subsidiary's function will be to outsource both coking and low ash non-coking from abroad for CIL's existing and future consumers in core and non-core sector industries. The outsourcing will be done from mines which will be developed or owned by it through the joint venture route.

At present, CIL is making its own efforts for participating in global bids for allocation of blocks abroad and/or participation in the equity base of foreign companies through the joint venture route.

According to a senior-level CIL source, the company may not be able to maintain the existing volume of supplies of coking coal to steel plants in the coming years as its own production is declining due to depletion of its coking coal reserve.

According to one view, dwindling reserves and de-rated capacities of old washeries, particularly in Bharat Coking Coal Ltd, are responsible for stagnation/ negative growth in the dispatch of washed coking coal.