NEW DELHI Feb 14 Steel Authority of India Ltd , India's second-biggest steelmaker, said its coal joint venture with four other Indian firms was in advance stages of due diligence on purchases of mines abroad, with no limit set on its investment.
Most steel producers in India, the world's third-largest coal importer, depend on coal shipments from overseas and are trying to buy mines in Africa and Europe.
SAIL-led International Coal Ventures Private Ltd (ICVL), whose five participating firms all are state-owned or state-controlled, has been scouting for mines since 2009.
"Our due diligence on some coal assets abroad are at advance stages," C.S. Verma, chairman of SAIL and ICVL, told reporters on Friday. "There's no cap on investment. All the five partners in ICVL are cash-rich companies."
Indian Steel Minister Beni Prasad Verma visited Australia and New Zealand in January to explore possibilities of developing assets there and securing long-term supply deals. India has also been looking at Poland for assets.
"I can't tell you where (we are doing due diligence), because there are only two or three areas," said SAIL's Verma, who accompanied the steel minister in his latest foreign trip.
JSW Steel Ltd, India's third-largest steel maker, has already bought U.S. mines that produce steelmaking coal.
India's coal imports rose 21 percent to 152 million tonnes last year, with most of that thermal coal used to generate power, according to Delhi-bases research firm OreTeam.
SAIL imports about 12 million tonnes of coking coal per year, but it has its own mines for iron ore, the other main raw material.
The company plans to raise its annual iron ore production capacity to about 42 million tonnes by next year from 30 million tonnes currently, Verma said, adding that it had enough iron ore to feed its expanding steel capacity.
SAIL will invest about $26 billion to more than double its steel-making capacity to 50 million tonnes per year by 2025, while India's total capacity is expected to triple to 300 million tonnes.
The company, which reported a 10 percent jump in profits after tax for the October-December quarter, is also looking to link up with foreign companies to raise capacity and has received a "tremendous response", Verma said. (Reporting by Krishna N Das; editing by Jane Baird)