Indian giant is looking for coal alliances in Australia Matt...

Indian giant is looking for coal alliances in Australia
Matt Chambers From: The Australian April 14, 2010 12:00AM ?
RIO Tinto, billionaire Gina Rinehart's Hancock Prospecting and Peabody Energy are among companies still in talks with state-owned mining giant Coal India to form Australian coal joint ventures, as India looks to fill a big forecast gap between supply and demand.

"Rio Tinto has been in discussions with Coal India about possible areas of partnership, but there is no agreement or specific joint venture at this stage," a Rio spokeswoman said yesterday.

It is understood Rio and Coal India have been in talks since the middle of last year, when the Indian company sought expressions of interest in Australia, the US, South Africa and Indonesia.

Coal India has narrowed down the field from 17 applications, with US giant Peabody appearing to be its preferred option. Peabody, which is trying to expand in Australia through a $US3.56 billion ($3.84bn) bid for Macarthur Coal, yesterday confirmed it was in discussions.

"Coal India and Peabody are in a broad range of preliminary discussions to explore long-term coal supplies and other possible co-operative ventures," Peabody said. "These are at very early stages and there have been no final agreements or decisions made regarding timing or structure."


Dow Jones has reported the Coal India board approved pursuing partnerships with Peabody.

A newspaper report says Peabody and Coal India are in the advanced stages of negotiating a $1bn deal to give Coal India a stake in four Australian mines. There is also potential for US coal joint ventures between Coal India and both Peabody and Rio.

It is also understood Hancock Prospecting is in talks about developing its Queensland thermal coal ground.

Hancock has two planned projects: Kevin's Corner and the more advanced Alpha project. If Coal India were to team up with Hancock, it would more likely be on Kevin's Corner.

Coal India is also planning to raise $US2.7bn by floating a 10 per cent stake by the end of August, according to the Financial Times.