Identifier
Created
Classification
Origin
09KOLKATA278
2009-10-22 04:42:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Kolkata
Cable title:
COAL INDIA SEEKS GREATER COMMERCIAL TIES WITH U.S. FIRMS
how-toVZCZCXRO6588 RR RUEHAST RUEHBI RUEHDBU RUEHLH RUEHNEH RUEHPW DE RUEHCI #0278/01 2950442 ZNR UUUUU ZZH R 220442Z OCT 09 FM AMCONSUL KOLKATA TO RUEHC/SECSTATE WASHDC 2478 INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RHMFISS/DEPT OF ENERGY WASHINGTON DC RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RUEHCI/AMCONSUL KOLKATA 3078
UNCLAS SECTION 01 OF 02 KOLKATA 000278
SENSITIVE
SIPDIS
STATE FOR SCA/INSB, EEB/ESC, S/SECC, OES
DEPT OF ENERGY (TOM CUTLER, MARK GINSBERG)
DEPT OF COMMERCE (SARAH BORWICK LOPP)
E.O. 12958: N/A
TAGS: EMIN SENV INV ENRG BEXP IN
SUBJECT: COAL INDIA SEEKS GREATER COMMERCIAL TIES WITH U.S. FIRMS
REF: KOLKATA 62
KOLKATA 00000278 001.2 OF 002
UNCLAS SECTION 01 OF 02 KOLKATA 000278
SENSITIVE
SIPDIS
STATE FOR SCA/INSB, EEB/ESC, S/SECC, OES
DEPT OF ENERGY (TOM CUTLER, MARK GINSBERG)
DEPT OF COMMERCE (SARAH BORWICK LOPP)
E.O. 12958: N/A
TAGS: EMIN SENV INV ENRG BEXP IN
SUBJECT: COAL INDIA SEEKS GREATER COMMERCIAL TIES WITH U.S. FIRMS
REF: KOLKATA 62
KOLKATA 00000278 001.2 OF 002
1. (SBU) Summary: Coal India, one of India's largest state owned
enterprises and also one of the world's largest coal mining
companies, is cash rich and expansion hungry. The Chairman of
Coal India is driven by the fundamental belief that coal, which
is the source for 65% of India's energy production, is essential
to India's growth. He is enthusiastic about increasing U.S.
commercial mining equipment sales, acquiring interest in or
securing supply from U.S. mines, and cooperating in third
country mining. He favors enhanced U.S.-Indian cooperation on
coal and advocates greater commercial participation in the
bilateral government dialogues. He acknowledges room for
negotiation on climate change with the GoI so long as mitigation
targets are "incremental and done in consultation with
stakeholders."
Coal: Essential to India's Growth
2. (SBU) During the Ambassador's recent visit to Coal India's
headquarters in Kolkata, its chairman, Partha Bhattacharyya,
emphasized the essential nature of coal to India's growth; coal
is the source for 65 percent of India's energy production. To
increase supply, Coal India is focused on increasing both
domestic production and overseas acquisitions. He estimated
that Coal India's domestic coal production, approximately 400
million tons or 82 percent of overall domestic production, will
grow 7.7 percent in 2010 and is targeted for 8.5 - 9 percent
growth in future years. He predicted that in India readily
accessible coal through open cast mining will be exhausted
within 50 years, and that companies will increasingly have to
turn towards underground mines and overseas supply.
U.S. Commercial Opportunities: Equipment, Acquisition and Third
Country Mining
3. (SBU) In 2009 Coal India placed orders worth USD 213 million
from the U.S. equipment manufacturers Bucyrus, Caterpillar, P&H,
Terex and Atlas Copco. Bhattacharyya highlighted the
competitiveness of U.S. firms, stressing their product quality
and after-sales service. He announced that a tender would soon
be released for equipment and potential after-sales service and
maintenance worth USD 1.6 billion over five years. He mentioned
a recent trip to the United States, where he had looked at U.S.
mines either as acquisition targets or secured coal suppliers.
He also had preliminary discussions with several companies about
cost plus contracting, whereby a U.S. company would operate
mines in third countries on behalf of Coal India for eventual
export to India. He mentioned that he had USD 1.5 billion in
cash to spend on acquisitions this year.
Enhanced U.S.-Indian Cooperation on Coal
4. (SBU) Commenting on the recent meeting of the Coal
sub-working group in Washington, Bhattacharyya advocated greater
private sector participation in the bilateral dialogue. He
regretted the lack of U.S. private sector involvement,
particularly small and medium enterprises. He inquired about
the status of the Department of Energy's Future Gen project as
he thought it had been discontinued and expressed interest in
participating in a similar future endeavor. He recommended that
the Coal Minister, Shriprakash Jaiswal, be invited to visit the
United States.
On Climate Change
5. (SBU) While referring to the GoI's public stance on climate
change negotiations - no mandated emission targets - he
indicated that it may be possible to introduce them so long as
they were "incremental and done in consultation with
stakeholders". He highlighted the importance of energy
KOLKATA 00000278 002.2 OF 002
efficiency improvements as a solution to the problem of climate
change. He expressed concern about judicial activism,
specifically in environmental law. He worried that Indian
courts would mandate or introduce stronger environmental
protections than those enshrined in Indian law.
Comment
6. (SBU) Coal India's Chairman has over the past year
demonstrated a persistent interest in working with both U.S.
companies and the U.S. government. Post recommends considering
Bhattacharyya's suggestions for greater private sector
participation in the coal sub-working group and extending an
invitation to the Coal Minister, perhaps as part of the
strategic dialogue. FCS will work with Coal India to ensure
that U.S. firms are aware of the upcoming tender for mining
equipment.
PAYNE
SENSITIVE
SIPDIS
STATE FOR SCA/INSB, EEB/ESC, S/SECC, OES
DEPT OF ENERGY (TOM CUTLER, MARK GINSBERG)
DEPT OF COMMERCE (SARAH BORWICK LOPP)
E.O. 12958: N/A
TAGS: EMIN SENV INV ENRG BEXP IN
SUBJECT: COAL INDIA SEEKS GREATER COMMERCIAL TIES WITH U.S. FIRMS
REF: KOLKATA 62
KOLKATA 00000278 001.2 OF 002
1. (SBU) Summary: Coal India, one of India's largest state owned
enterprises and also one of the world's largest coal mining
companies, is cash rich and expansion hungry. The Chairman of
Coal India is driven by the fundamental belief that coal, which
is the source for 65% of India's energy production, is essential
to India's growth. He is enthusiastic about increasing U.S.
commercial mining equipment sales, acquiring interest in or
securing supply from U.S. mines, and cooperating in third
country mining. He favors enhanced U.S.-Indian cooperation on
coal and advocates greater commercial participation in the
bilateral government dialogues. He acknowledges room for
negotiation on climate change with the GoI so long as mitigation
targets are "incremental and done in consultation with
stakeholders."
Coal: Essential to India's Growth
2. (SBU) During the Ambassador's recent visit to Coal India's
headquarters in Kolkata, its chairman, Partha Bhattacharyya,
emphasized the essential nature of coal to India's growth; coal
is the source for 65 percent of India's energy production. To
increase supply, Coal India is focused on increasing both
domestic production and overseas acquisitions. He estimated
that Coal India's domestic coal production, approximately 400
million tons or 82 percent of overall domestic production, will
grow 7.7 percent in 2010 and is targeted for 8.5 - 9 percent
growth in future years. He predicted that in India readily
accessible coal through open cast mining will be exhausted
within 50 years, and that companies will increasingly have to
turn towards underground mines and overseas supply.
U.S. Commercial Opportunities: Equipment, Acquisition and Third
Country Mining
3. (SBU) In 2009 Coal India placed orders worth USD 213 million
from the U.S. equipment manufacturers Bucyrus, Caterpillar, P&H,
Terex and Atlas Copco. Bhattacharyya highlighted the
competitiveness of U.S. firms, stressing their product quality
and after-sales service. He announced that a tender would soon
be released for equipment and potential after-sales service and
maintenance worth USD 1.6 billion over five years. He mentioned
a recent trip to the United States, where he had looked at U.S.
mines either as acquisition targets or secured coal suppliers.
He also had preliminary discussions with several companies about
cost plus contracting, whereby a U.S. company would operate
mines in third countries on behalf of Coal India for eventual
export to India. He mentioned that he had USD 1.5 billion in
cash to spend on acquisitions this year.
Enhanced U.S.-Indian Cooperation on Coal
4. (SBU) Commenting on the recent meeting of the Coal
sub-working group in Washington, Bhattacharyya advocated greater
private sector participation in the bilateral dialogue. He
regretted the lack of U.S. private sector involvement,
particularly small and medium enterprises. He inquired about
the status of the Department of Energy's Future Gen project as
he thought it had been discontinued and expressed interest in
participating in a similar future endeavor. He recommended that
the Coal Minister, Shriprakash Jaiswal, be invited to visit the
United States.
On Climate Change
5. (SBU) While referring to the GoI's public stance on climate
change negotiations - no mandated emission targets - he
indicated that it may be possible to introduce them so long as
they were "incremental and done in consultation with
stakeholders". He highlighted the importance of energy
KOLKATA 00000278 002.2 OF 002
efficiency improvements as a solution to the problem of climate
change. He expressed concern about judicial activism,
specifically in environmental law. He worried that Indian
courts would mandate or introduce stronger environmental
protections than those enshrined in Indian law.
Comment
6. (SBU) Coal India's Chairman has over the past year
demonstrated a persistent interest in working with both U.S.
companies and the U.S. government. Post recommends considering
Bhattacharyya's suggestions for greater private sector
participation in the coal sub-working group and extending an
invitation to the Coal Minister, perhaps as part of the
strategic dialogue. FCS will work with Coal India to ensure
that U.S. firms are aware of the upcoming tender for mining
equipment.
PAYNE