Coal India Ltd.’s ambitious plan to reopen its abandoned coal projects is gradually taking-up shape as few of its subsidiaries have started finalising the tenders floated against this scheme.
It is worth noting that sale of abandoned mines was initiated via auctions based on revenue sharing mechanism. This was envisaged as an attempt to restart coal production after operations at these projects were discontinued mainly on account of difficult mining conditions and financial losses.
To execute the process, CIL subsidiaries have been floating separate tenders for various abandoned mines. So far, these subsidiaries have offered a total of 30 such mines over the two tranches of sale.
In a latest development, Western Coalfields Ltd. has awarded mining contract for Walni underground. The mine located in Maharashtra was allocated at a revenue share of 4.23%.
This comes after Madhujore underground coal project of Eastern Coalfields Ltd. (ECL) had become the first abandoned mine to be sold under this provision. The mine located in West Bengal was allocated at a revenue share of 32%.
Both these mines have a cumulative extractable reserve of around 50 million tonnes (mnt). Meanwhile, tenders for remaining mines are under different stages of development.
Aim to boost production
India has pushed up domestic coal production to fuel the rising economy, due to which there is a greater accountability on parts of CIL, which is the major contributor.
To keep pace with the demand, the company has implemented various provisions to scale-up coal production. Apart from sales of abandoned mines, it has also identified several new projects for development via external resources through the mine-developer-operator route.
Maintaining upbeat performance in current fiscal (FY23), CIL has scaled up coal production, by registering a robust growth of 17% to 412.6 mnt in April-November, 2022. The production target for the fiscal is 700 mnt.
On a longer run, it has outlined a roadmap where it aims to achieve 1 bnt coal production by FY25.
Can the stringent measures to boost domestic coal production help India to mitigate costlier imports? To know more, sign in for CoalMint’s Asia Coal Trade Summit 2023 to be held in Bangkok, Thailand, on 24-25 April 2023.
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