wall street journal article

todays date on this article: By Saurabh Chaturvedi and Rajesh Roy
Of DOW JONES NEWSWIRES

NEW DELHI -(Dow Jones)- An Indian consortium of five state-run metals and mining companies has asked for more time from Australia's Aquila Resources Ltd. (AQA.AU) to buy its Washpool coking coal project, in a deal valued at A$301 million, two senior government officials said Wednesday.

Earlier this month, Aquila approved a binding bid from India's International Coal Ventures Pvt. Ltd. to acquire 100% ownership of the coking coal project in the northeastern state of Queensland, the officials said.

However, the consortium can't meet a Feb. 24 deadline to firm up the purchase due to delays in getting Indian government approvals.

"We have sought an extension of the exclusivity talks period by two to three weeks in order to get necessary approvals in place," one of the officials, who didn't want to be identified, told Dow Jones Newswires.

Aquila company officials didn't immediately respond to requests for comments on the development.

If the deal goes through, it will be the Indian group's first overseas investment since its inception as a joint venture company in 2009. The consortium, comprising Steel Authority of India Ltd. (500113.BY), Coal India Ltd. (533278.BY), NTPC Ltd. (532555.BY), NMDC Ltd. (526371.BY) and Rashtriya Ispat Nigam Ltd., has been scouting for mining assets in countries such as Australia, the U.S., Indonesia, South Africa and Mozambique, but hasn't struck any deals so far.

India--the world's third-largest coal producer--doesn't have enough coking coal to feed its expanding steel sector, which obliges its companies to import the fuel, a key component in steelmaking. India imports around 30 million tons of coking coal annually and the quantity is expected to rise threefold by 2017, according to the steel ministry.

International Coal Ventures, or ICVL, needs cabinet approval to buy the Washpool project, as rules require this for any overseas asset purchase above INR15 billion, or A$283 million.

The plan also needs clearance from a government panel headed by the steel secretary that is expected to meet in the second week of March, one of the officials said.

ICVL placed its Washpool bid in November. The Royal Bank of Scotland is advising it on the deal, while UBS Australia is advising Aquila Resources.

The asset has an estimated coking coal reserve of 108.3 million metric tons, and production could start as early as 2013, an official said.

-By Saurabh Chaturvedi and Rajesh Roy; Dow Jones Newswires; +91-11-4356-3304; [email protected]