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Foreign Coal Assets of Indian Miners Are on Financial Stress

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GVK Coal Developers, which owns mines in Australia, is burdened with $885 million of debt, according to GVK group's annual report.

Source: ET

SNP Insights

The companies having coal mining assets are feeling the heat with increasing debt due to revenue loss from falling coal price in international market. The coal price fall nearly 46% from 2011 to 2015. Due to less coal import by China and Japan the demand reduced largely in international market and hence drag down the price. Also in coming years as many countries are trying to increase the percentage of renewable energy in their energy mix and have taken steps to increase domestic coal production to full fill their energy needs. These developments can further effect the demand and price of coal in International market. So, for Indian companies it may be a better option to invest in domestic coal mining sector rather than investing in foreign coal mining assets in future.

Source: SNP Infra Research