Coal India Limited (CIL) has issued letters of acceptance for seven coal projects to be pursued through engagement of Mine Developer and operators (MDO), the company announced in an exchange filing. Cumulatively, these projects have production capacity of close to 100 million tonne per year (MT/Y).
The intent of engaging MDOs through open global tenders is to increase domestic coal output and reduce import dependency to extent possible.
Government to increase coal import to generate more power
India's government also added that the import of coal will be scaled up to 219 million tonnes by the end of FY23. This will be done as a part of efforts to prevent scarcity of coal and avert a power crisis in the country.
Of these seven projects, three belong to CCL and two to MCL. SECL and ECL account for a solitary project each.
Two of the projects, Siarmal open cast project (OCP) of MCL, Odisha having 50 MT/Y output capacity and Hura ‘C’ OCP of ECL, West Bengal of 3 MT/Y capacity are expected to start mining operations during the ongoing financial year.
The state owned coal miner is tracking a total of fifteen Greenfield coal projects to mine coal through MDOs. CIL’s investment component would be to the tune of Rs. 20,600 Crores largely spread on land acquisition, rehabilitation and resettlement issues. In some cases on railway sidings as well.
The contract period of engagement is for 25 years or life of mine whichever is less.
Having total rated capacity of around 169 MT/Y eleven of, the total fifteen projects, are opencast and four underground. While the capacity of OC projects is secured at 165 MTY, UG projects add up to the rest.
Why MDOs?
The role of MDOs would be to excavate, extract and deliver coal to CIL’s coal companies in accordance to the approved mining plan. Ownership of the mines and coal rests with CIL. Sale of coal would be done by CIL. MDOs would bring to the table technology infusion, bulk of the capex investment, economic viability and efficiency in operations for increased production.
Since contracts offered to them are on long-term basis, allied infrastructure at mine projects also would be developed by these private players. They shall facilitate R&R issues, land acquisitions, green clearances and coordination with State and Central Pollution Boards for fast tracking the required approvals.
Of the balance 8 projects, LoA for two projects - Madannagar OCP (12 MT/Y) and Pelma OCP (15 MT/Y) of SECL will be issued shortly. The 6 remaining projects are at different stages of tendering.
