State-run Coal India, the world's largest coal mining company today said that it was urgently seeking strategic alliances.

The alliances would be in the form of equity or offtake deals with major mining firms in Indonesia, Australia and the US and 10 producers had been shortlisted, Coal India director A K Sarkar told Reuters on the sidelines of the Coaltrans conference in Mumbai.

Sarkar said Coal India would not try to bridge the entire 81 million tonne coal supply gap but restrict itself to what the Central Electricity Authority instructs it to buy.

Notwithstanding the company's push to ratchet up domestic coal output, India would need to import thermal coal for the foreseeable future or at least for five years, he said.

India is expected to import 35 million tons of coal in the year starting 1 April, which is set to rise to 81 million tons in 2011-12 he said.

Indian companies are increasingly looking for coal resources in Indonesia and Australia to meet their power needs, according to Australia & New Zealand Banking Group Ltd.

India and China are causing a pressure on global coal supplies as they face growing power requiremens to run factories and homes.

For instance, in recent days, Essar Group, following the lead by Tata Power Co and Reliance Power Ltd, is acquiring Trinity Coal Corp in a bid to secure supplies  (See: Essar in deal to acquire US coal miner Trinity for $600 million). 

According to Crisil Ltd, a unit of Standard & Poor's, demand for coal in India could be 1.4 billion metric tons by 2020, exceeding domestic supply of 1.1 billion tons.

Coal India Ltd is looking at 10 proposals in Indonesia, Australia and the US to strike strategic coal alliances including taking equity stakes in mines, according to Sarkar, who was speaking in an interview.

He said nothing would deter the company from acquisition of any strategic asset of any kind in order continue to be the biggest coal supplier. Sarkar said the the company had been a producer of coal but now it would have to become an importer which it sees as an opportunity to increase its profits.