International Coal Ventures ltd (ICVl), the consortium of five big state-owned entities which had been set up in 2009 to enable them to jointly acquire assets overseas, seems to be heading towards a dead-end as prevailing volatility in global prices of the dry fuel over the last one year coupled with conflicting interests of the constituents, has put a spanner in its acquisition plans.
According to sources, ICVl which has already witnessed the exit of National Thermal Power Corporation (NTPC) and Coal India ltd (CIl) too has distanced itself from it (though till date it has not formally conveyed its detachment from the consortium), is currently left with three constituents - state-owned mining major NMDC, Steel Authority of India ltd (SAIl) and Rashtriya Ispat Nigam ltd (RINl) - none of which have managed to finalise any overseas acquisition in the last five years.
Despite various tours undertaken by SAIl Chairman C S Verma - who is also part-time chief of NMDC and heads ICVl - to scout for mineral reserves right from South America to the US over the past one year, neither the mining company nor the steel firm have till date managed to firm up any reserve for themselves under the aegis of ICVl.
Whenever he is asked about the ICVl, Verma gives futuristic statements and claims that some assets are being shortlisted by the consortium, while the reality remains that no progress has been made by it since 2009.
Even last month Verma had claimed that ICVl has identified around four to five assets, but refused to divulge any details about them or whether they would be acquired finally or not.
Sources familiar with the developments related to ICVl further informed The Pioneer that NMDC too is currently focusing only on conducting a due diligence on some nine to 10 reserves containing gold, diamond and iron ore in Zimbabwe which the Southern African Government had offered to India with the possibility of having a joint venture on developing them (during Steel Minister Beni Prasad Verma's visit to that country in April 2013).
They added that the mining major, which had scouted for possible reserves in South America and the US, is not contemplating any other site for now due to volatile market conditions and is only focused on Zimbabwe. It is not even looking at reserves within the African continent.
The main reason behind the poor show of the venture mainly emerged from the conflict of interest within the requirements of the constituents as CIl and NTPC were keen on acquiring thermal coal assets (which is needed for producing power). While the remaining components like SAIl, NMDC and RINl focussed more on coking coal assets for steel making purposes.
SAIl, RINl and NMDC, incidentally are also part of a consortium which was awarded the prestigious iron-ore mining and steel plant project by the Afghanistan Government in its Hajigak region in November 2011.
Owing to the prevailing geo-political scenario in Afghanistan, the project has failed to take off as questions related to safety of Indian workforce there and the feasibility of the project have remained unanswered.
Also after initially announcing that an investment of $10.8 billion would be made to set up a 6.1 million tonnes per annum (mtpa) steel plant along with an 800 MW power plant in Hajigak, the project has been considerably scaled down and now a steel plant of 1.25 mtpa and a 120 MW captive power plant would be set up with an investment of $2.9 billion.
Though the Steel Ministry is currently evincing interest in acquiring some mines in Poland and the Steel Minister had visited that country in November 2013, even if anything is firmed up, it would be more on a Government to Government basis.