The Anil Dhirubhai Ambani Group has evinced interest in acquiring PT Berau Coal, one of the largest thermal coal firms in Indonesia.
Confirming this, an ADAG spokesperson said, "We are looking for coal assets across the globe, particularly in Indonesia," he said.
The group has earmarked over Rs 4,000 crore (Rs 40 billion) to acquire coal mines in foreign countries.
The buy will have significant synergies for ADAG power company Reliance Power that was awarded the 4,000 Mw imported coal- based project at Krishnapatnam in Andhra Pradesh.
Reliance Power, which is also raising funds through a maiden issue, is expected to be the group's vehicle for bidding for PT Berau.
ADAG may face competition from at least another Indian contender as the Sajjan Jindal-controlled JSW Energy has also decided to evaluate the acquisition proposal.
Said Seshagiri Rao, joint managing director, JSW Energy, "It is not clear whether it would be an outright sale or a small equity participation. We are looking for coal security. So we will evaluate once there is clarity in the proposal."
P T Berau, a three-way joint venture between PT Armadian Tritunggal (51 per cent), a Dutch company dan Rognar Holding BV (39 per cent) and a Japanese firm Sojitz Corp (10 per cent) has a production capacity of over 7 million tonnes.
Investment bankers said a few more Indian companies are expected to join the fray shortly with Indonesia becoming the preferred destination for domestic firms to secure coal.
The proposed sale of PT Berau Coal is likely to replicate the sale of PT Bumi, another Indonesian coal company that had drawn bids from several Indian buyers.
Tata Power, the country's largest private power firm, bought 30 per cent in it for $1.1 billion, beating six bidders including Reliance Energy.
Tata Power, however, is not interested in P T Berau, a top source in the company, said. Merrill Lynch is learnt to be its advisor for sale.
India now imports 25 million tonnes a year of thermal coal, and its requirements are expected to double by 2020.