US coal miner offers ICVL stake in three operating mines
New Delhi: Southern Coal Corporation, the largest privately held coking coal producer in the US, has offered ICVL equity participation in three operating mines.
"A confidentiality agreement has already been signed between the two parties and detailed due diligence has been commenced," a source in the know said.
Southern Coal Corporation, owned by The Greenbrier Resort owner Jim Justice, operates mines in Alabama, Kentucky, Tennessee, Virginia and West Virginia.
International Coal Ventures Ltd (ICVL), a consortium of state-run firms incorporated for buying coal blocks overseas in 2009, has also appointed an investment banker to do the valuation of the mines and lead the due diligence process, the sources said.
Southern Coal Corporation operated 33 mines and produced 7.2 million tonnes of coal in 2011.
ICVL Chairman C S Verma could not be reached for comments. Verma also heads SAIL and NMDC, both ICVL consortium members.
The special purpose vehicle ICVL has often faced criticism for failing to strike any deal since its inception. However, Verma has always countered the nay-sayers and remained hopeful of striking a deal at the right time.
The initial members of the ICVL were SAIL, NTPC, CIL, RINL, NMDC. But, NTPC decided to opt out of the consortium as it was seeking thermal coal blocks, while other members were keen on coking coal.
Meanwhile, ICVL has evinced interests in buying Rio Tinto-owned Riversdale Mining's coal mines in Mozambique. It is also open to acquire some stake in the Africa-focused miner.
Anglo-Australian mining giant Rio Tinto, which took over Riversdale Mining in 2011 for USD 4 billion by buying out Tata Steel's over 24 percent stake and Brazilian steel maker Companhia Siderurgica Nacional's (CSN) entire 19.35 percent holding in Riversdale, has proposed complete divestment of the assets, saying it was not viable.
ICVL was also keen in taking over Riversdale Mining back then, but finally refrained from bidding for Riversdale, which has four coal reserves estimated to a total of 1.7 billion tones in Mozambique.