International Coal Ventures (ICVL), a special purpose vehicle formed by five leading PSUs to scout for coal properties abroad, is eyeing equity stake in an Australian mining firm, SAIL chairman S K Roongta said on Monday.

"Some mines in Australia are being looked at. We are looking for an equity stake...We are at it," Roongta told reporters on the sidelines of a conference here.

Without identifying the mine in which the SPV is eyeing stakes, the SAIL chairman said, "We are looking for coal mines wherever it is logistically possible to import coal

in India".

Industry insiders said ICVL, the SPV of SAIL, RINL, CIL, NMDC and NTPC, is in the process of picking up over 10 per cent stake in Australian mining firm Gloucester Resources.

Through its merchant banker Merrill Lynch, ICVL had, over a month ago, bid for a minority holding in Gloucester, but the offer was rejected over valuation, an official source said.

"They (Gloucester Resources) have now asked ICVL for a counter offer, which the SPV's board is considering," the source added.

It may cost ICVL about $1 billion to clinch the deal with the Australian coal company, the source said.

The Indian SPV may also try for more stake in Gloucester, once it is through with the initial deal, the source said.

An in-principle understanding has been reached between ICVL and Gloucester for supplying 50 per cent of the coal off-take from the proposed greenfield project to the Indian SPV, irrespective of the equity sharing pattern, he added.

Gloucester Resources operates a sizeable coal block in New South Wales with reserves of around 450 million tonnes of coking and thermal coal. It is in the process of setting up a greenfield project in Gloucester, over 300 km away from Sydney.

Industry watchers said picking up of equity stake in Gloucester would boost operations of the Indian PSUs, who need coking and thermal coal for their existing and upcoming units.

Faced with an imminent coal shortage of around 200 million tonnes by the end of the 11th Plan, ICVL has been scouting for coal assets, properties and mine takeovers in the US, Canada and Indonesia.

ICVL has already roped in 10 investment bankers, including Royal Bank of Canada, Royal Bank of Scotland, UBS, Merrill Lynch, Citi Bank and Deutsche Bank, to identify coal properties across the globe.

The demand for coal by end of 11th Plan will be around 721 million tonnes against a targeted production of about 520 million tonnes by CIL.

India plans to import 20 million tonnes of coal during 2008-09. Power stations have been requested to import coal as per their requirements.

SAIL/BSE Rs 63.35p

NSE Rs 63.55 p

NMDC/BSE Rs 139.30 q

NSE Rs 139.45 q

NTPC/BSE Rs 153.65 p

NSE Rs 153.90 p

GLoucester/Sydney Stock Exchange A$3.16 p