India's quest to lock in sources of supply of metallurgical coal is set to drive a new wave of coal M&A in Australia just as recent acquisitions in the sector have highlighted a keen appetite for strategic investments in the sector, according to Bede Boyle at consultancy Coal Ventures Ltd. 
Mr Boyle pointed to an Indian government coal delegation to Sydney earlier this month, where Coal India director Pradeep Kumar Tiwari estimated that Coal India would require some $US4.5 billion to invest in the acquisition of overseas coal assets.
"India has scarce high quality metallurgical coal reserves and will have a continuing dependence on Australian high quality metallurgical coals to supply Indian steel industry," said Shri Narendra Singh Tomar, the minister of steel and mines, who led the delegation, Mr Boyle told clients in a report.
India's emergence as a major steel-producer is driving growth for metallurgical coal imports, while it is also expected to increase demand for higher quality, low-ash thermal coal because of a government directive that requires all new coal-fired power plants to use super-critical technology starting in 2017. India's own coal resources are typically low-energy and high-ash, used for the sub-critical technology that dominates the Indian market at present.
The forecast for increased Indian investment in Australia's coal sector comes as M&A activity picks up with a number of recent investment, including Glencore's link-up with privately owned Bloomfield Group to buy Vale's Integra mine in the Hunter Valley, and Stanmore Coal's acquisition of metallurgical coal areas in Queensland's Bowen Basin from Peabody Energy, with the intention of extending the Isaac Plains mine.
New Hope Corporation Limited has agreed to acquire Rio Tinto's 40 per cent interest in the Bengalla thermal coal joint venture in NSW.
Meanwhile, Mr Boyle pointed to reports by IHS that Australian "clean coal" technology company Exergen is acquiring the Wilkie Creek mine in Queensland mine from Peabody for $10 million, conditional on a capital raising and on finalising port and rail haulage contracts.