The world's largest coal producer, Coal India Ltd (CIL), is in talks to buy mines from two US-based coal miners Peabody Energy and Massey Energy to bridge the growing coal shortage in the country and rising imports that are estimated to reach over 100 million tonnes by 2012.

Without revealing the deal value or the location of the mines, The Economic Times today quoted CIL chairman Partha Bhattacharyya, ''They expressed interest in offering certain mines to us and we are looking at that.''

CIL, which mines nearly 80 per cent of India's total coal production, has been in talks with both the US coal miners as well as with Sinar Mas of Indonesia since April 2010 to acquire coal mines or form joint ventures.

CIL is seeking mines that produce both thermal coal and metallurgical coal of Peabody in the US or Australia in a deal worth over $1 billion, while it is looking for either buying coal mines or forming a joint venture with Massey.

St Louis, Missouri-based Peabody Energy, the world's largest private-sector coal company has 9 billion tons of coal reserves, manages or owns interests in 28 mining operations in the US and Australia and has a minority stake in Venezuela's largest coal mine.

Peabody Pacific, the Australian subsidiary of Peabody Energy is one of Australia's largest mining companies having 10 mines in Queensland and New South Wales. It operates the Burton, North Goonyella, Eaglefield, Millennium and the Wilkie Creek mines in Queensland and four mine sites in New South Wales extending from the Hunter Valley coalfields west of Newcastle to the Southern coalfields just below Sydney.

Richmond, Virginia-based Massey is the fourth largest producer of coal in the US and the largest coal producer in Central Appalachia region.

The company has 47 coal mines with 2.3 billion tons of proven and probable coal reserves, all of which are in the US located in Southern West Virginia, Eastern Kentucky, Southwest Virginia and Tennessee.

Armed with its board-approved $2 billion war chest for overseas alliances and acquisitions, CIL had said in March 2010 that it was urgently seeking strategic alliances in the form of equity or offtake deals with major mining firms in Indonesia, Australia and the US. (See: Coal India looking for coal resources abroad to bridge supply shortfall)

CIL, which last month raised $3.4 billion in India's biggest IPO, meets nearly 80 per cent of India's coal needs and produced 431.5 million tonnes of the country's total coal output of 531.5 million tonnes in 2009-10.

According to Crisil Ltd, a unit of Standard & Poor's, demand for coal in India could be 1.4 billion metric tons by 2020, which is largely used by the power generating and steel industry.

With rising demand for power, there are 86 upcoming coal-fired power projects currently in India, of which 29 are near completion, 29 are under construction and another 28 are at the development stage, awaiting government approvals.

With India's demand of coal outstripping supply, 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.

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.

Indian companies are increasingly looking for coal resources in Indonesia and Australia to meet their power needs as demand for coal in the country is projected to rise to 1.4 billion metric tons by 2020, exceeding domestic supply of 1.1 billion tons.