The proposed rights issue of Resource Generation in its South African coal mining project Boikarabelo mine would be subscribed by IL&FS Energy Development Co along with its partner, reports indicate.

If existing investors don’t show much interest in the issue, IL&FS Energy, along with two other investors, committed to acquire up to 80 percent of the issue or any shortfall.

IL&FS has formed a special purpose vehicle, Valu Investments Pte, in joint venture with entrepreneur Jaimin Vyas for this purpose.

Therefore, the possible investment of IL&FS in the coal project depends on the extent the proposed rights issue of Resource Generation devolves.

The Boikarabelo mine has about 6.4 billion tonne of thermal coal resource in South Africa’s Waterberg coalfield region, which is being developed in two stages at a cost of $530 million. Production would kick off from 2015 at 6 million tonne a year, which is to be scaled up to 25 mn tpa later.

It may be recalled that Indian firms CESC and Bhushan Steel have earlier struck separate offtake agreement with the Australian miner.

IL&FS Energy has a growing portfolio of investment in India’s energy sector, earlier partnering with ONGC for a 726 mw power project in Tripura, which was recently  inaugurated.