Coal India Ltd (CIL) has issued letters of acceptance (LoA) for seven coal projects involving mine developer and operators (MDO) and with a cumulative annual production capacity of about 100 million tonnes (mt).
The state-owned miner is looking to engage MDOs through the open global tender route in order to increase domestic coal output and reduce import dependency, the company said in a press statement.
CIL is tracking 15 greenfield projects to mine coal through the MDO route. The estimated investment of ₹20,600 crore would largely go towards land acquisition, rehabilitation and resettlement issues as well as railway sidings.
“Of the seven projects for which it has issued LoA, three belong to Central Coalfields (CCL) and two to Mahanadi Coalfields (MCL) while South Eastern Coalfields (SECL) and Eastern Coalfields (ECL) account for one project each. Two of the projects, Siarmal open cast project (OCP) of MCL in Odisha, having an annual output of 50 mt, and Hura ‘C’ OCP of ECL in West Bengal of 3 mt capacity are expected to start mining operations during the ongoing financial year,” the release said.
LoA for two projects — Madannagar OCP (12 mt) and Pelma OCP (15 mt) of SECL — will be issued shortly. The remaining six projects are at different stages of tendering.
The contract period of engagement is 25 years or the life of the mine, whichever is less.
Role of MDOs
The total rated capacity of the 15 projects involving MDOs is close to 169 mt. Eleven of these mines are opencast (165 mt) and the rest underground (4 mt).
The role of MDOs would be to excavate, extract and deliver coal to CIL’s coal companies in accordance with the approved mining plan. The ownership of the mines and coal would rest with CIL, and the company will handle the sale of coal, it said.
MDOs would bring to the table the required technology, the bulk of the capex investment, economic viability, and efficiency in operations for increased production.
Since the contracts are long-term, the allied infrastructure at mine projects would also be developed by these private players. They will facilitate R&R issues, land acquisitions, green clearances, and coordination with state and Central pollution boards for fast-tracking approvals.