Reliance Industries Limited (RIL), led by MukeshAmbani is known to be sitting on a cash chest of Rs. 85,000 crore and is looking to invest money to acquire big coal mines in the US. This comes after RIL had committed an investment of $10 billion (Rs. 63,400 crores) to acquire various shale gas assets in the US. This acquisition is part of a large scale integrated project comprising coal mining, a coal-to liquid (CTL) plant announced by RIL back in 2008.
“The company is seriously looking at acquiring some coal mines in the US,” said PMS Prasad, executive director, RIL, who is also on the board of RIL. “We continue to look at opportunities at home, there is a huge coal shortage and acquiring coal mines in the US makes a good play. We are looking for the same.”
RIL has already invested 6.1 billion (Rs. 38,674 crore) in acquiring shale gas assets in the US and plans to invest another 4 billion (Rs. 25,360 crore) in the next three years.The company’s shale gas operations have significantly contributed to its FY13 revenues and are likely to add sustainable revenues going ahead as well.These shale gas operations reached record revenues and operating profit of US$ 616 million and US$ 483 million in FY13.
Mr. Prasad added, “The investment of $10 billion is what the company has already committed. We will be investing more money as we continue to look for more acquisition opportunities in the fertiliser, refining, petrochemicals and power space. The only condition is that opportunity has to be good in terms of returns to the company.”Talking about the company’s strategy to utilise the shale gas produced out of its assets in the US, Prasad said RIL would rather set up a gas-based fertiliser, petrochemicals or power plant in the US and bring home the end products than first convert the cheap shale gas into costlier LNG and ship the same to India.
RIL’s share of natural gas output from its US shale gas operations has reached over 11 million standard cubic metres per day (mmscmd) against 14 mmscmd from the KG-D6 fields.