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 have highlighted a keen appetite for strategic investments in the sector, according to Bede Boyle at consultancy Coal Ventures. 
Mr Boyle pointed to an Indian government coal delegation to Sydney earlier this month, when Coal India director Pradeep Kumar Tiwari estimated that the company would require some $US4.5 billion ($6.1 billion) to invest in the acquisition of overseas coal assets.
Mr Boyle told clients in a report that Shri Narendra Singh Tomar, the minister of steel and mines who led the delegation, had said that: "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." 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.
The forecast for increased Indian investment in Australia's coal sector comes as M&A activity picks up with a number of recent investments. These include 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.