Indian coal miner Coal India Ltd., struggling to meet production targets, has accelerated efforts to buy unlisted overseas firms after receiving approval from the Indian Finance Ministry.

This comes as talks to acquire stakes in U.S. miner Massey Energy and Australian Peabody Energy failed because of procedural delays in government approval.

Coal India is facing its first annual output drop in 13 years. Heavy rains and a recent one-day strike had caused a 5 per cent decline in production for the first six months of the year.

"We have to try every possible option including acquisitions to meet supply commitments. We're still struggling to meet our production targets," Coal India Chairman N.C. Jha told Bloomberg.

The Indian government's approval in October will allow the company to act faster, he added.

The Finance Ministry gave Coal India the go signal to scout and purchase unlisted firms, but it did not relax the required minimum 12 per cent internal rate of return from such acquisitions.

"The Finance Ministry has said we can go ahead with the proposals even if the return is below 12 per cent if they are for strategic reasons, but those has to be cleared by them," Jha told the Economic Times.

Coal India, the world's largest coal miner, has $9.1 billion of cash to buy unlisted overseas companies.

"The kind of cash Coal India has, it makes every sense to look for acquisitions," Prasad Baji, a Mumbai analyst said in Bloomberg News. "Although we have enough resources in the country, we still need to look outside because of some fundamental problems."

The company mined 431.3 million metric tonnes of coal in the year ended March 31. It aims to hike production by 5 per cent this year to meet demand.

Daily output rebounded almost 60 per cent from the rainy months of August and September to 1.2 million metric tonnes and is expected to go up to 1.5 million tonnes by the end of this month, Jha said.