Likely to be named SAIL Videsh, the move comes in the wake of the existing special purpose vehicle, International Coal Ventures (ICVL, which is a joint venture between SAIL, NMDC, RINL, NTPC and Coal India, failing to make much headway in procuring coal assets abroad during the past two years.
The proposal to create SAIL Videsh, as a subsidiary of the steel major, is being examined in the Steel Ministry, sources in the know said, adding a final decision is expected soon.
"The ministry is examining either to wind up ICVL or revamp it and make it a 100 per cent subsidiary of SAIL and ask NMDC, NTPC, RINL, CIL to leave the SPV," a source added.
When contacted, Steel Secretary Atul Chaturvedi said, "the ministry is examining options to restructure ICVL or to give a new shape to it because in the present form it has not achieved desired progress. So we are examining how we can resolve its structural and decision-making deficiencies.
"The bottomline is that we have to acquire raw materials resources abroad. There is and should be no compromise in achieving that objective."
ICVL was formed to acquire thermal and coking coal properties abroad in 2008 with a corpus of Rs 10,000 crore, with SAIL being the major contributor. The Steel Ministry is its administrative ministry.
Another official source said the operations of ICVL is only limited to scouting for coal properties abroad, which would have only partly met the raw material requirements of steel PSUs, mainly Rashtriya Ispat Nigam, which also need rich iron ore resources from abroad.
"So, SAIL Videsh or whatever the proposed subsidiary would be christened, will also look at iron ore resources abroad," the official said.
RINL lacks captive raw material reserves while SAIL and NMDC has huge reserves of the vital mineral required in steel making.
However, the path of restructuring ICVL would not be an easy task as the proposal would have to be cleared by the Cabinet, considering two members of the SPV belong to ministries other than that of steel.
Coal Videsh, the subsidiary of the country's largest coal producer Coal India, under the Coal Ministry, is already working on forming joint ventures with global mining majors like Rio Tinto, to mine and import coal from abroad.
ONGC Videsh, the wholly-owned subsidiary of ONGC under the Oil Ministry, already possess many oil and gas properties abroad.