The Hindu Business Line : Coal India plans global bids to develop, operate mines

Kolkata, Feb. 18 Coal India plans to float a global tender for private participation in development, operation and maintenance of eight coal blocks on a long-term basis, by end-February.

Global mining companies including those from China have shown keen interest in the project during the pre-bid meetings. According to a CIL official, “The tender document is in the final stages of preparation and may be floated for participation in another 10 days’ time.”

The interested companies will take complete responsibility for exploration in these blocks and developing and operating the mines on a time-bound basis.

Buy-back at fixed price

CIL will fund the capital expenditure for the projects on condition that the entire production would be sold back to the Indian major at a contracted price. The initiative is part of its effort to increase coal production in the country.

Though the possibility of striking joint ventures with interested companies was not ruled out, CIL sources said that the ‘develop, operate and maintenance route’ was preferred by the global mining companies to minimise their investment risks.

Meanwhile, at a meeting held this week, the Union Coal Ministry had asked CIL to accelerate the process of inviting private participation in creating washing capacities. The scheme aims at supplying washed coal from the open cast mines to all non-pithead power stations.

All the CIL subsidiaries except Northern Coalfields Ltd, dispatching coal primarily to pithead power stations, are under the purview of the scheme.

“Some of our subsidiaries will start floating tenders inviting private participation in setting up washeries and running and maintenance of the same on a long-term basis, beginning March. The entire process would be completed in three months,” the official said.

Coal India will finance the cost of setting up the washeries and will enter into a long-term washing agreement with the private partner.

Cost reduction

Preliminary estimates suggest that the capacities of each such washery may vary between 2.5 million tonnes and 5 million tonnes, leading to a substantial reduction in washing cost from the existing Rs 240 per tonne.

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