In a bid to tap the latent coal reserves of some of its closed and discontinued underground mines, state-run Coal India has awarded 23 such mines on a revenue sharing model to successful bidders of the private sector.

The cumulative peak rated capacity of these mines is of 34.14 million tonnes per year (MT/Y), while the total extractable reserves are estimated at 635 MT, CIL said in a stock exchange filing on Wednesday.

Earlier, Coal India had identified a total of 34 discontinued mines where good quality coal reserves are lying dormant but may not be financially viable for CIL to mine them. Thus the coal major has decided to tender and offer these mines to willing private sector players who are prepared to operate and produce the dry fuel and share part of the revenue with CIL.

“Successful bidder is the one who offers the maximum revenue to the authority, which is the coal company. The minimum revenue to be shared is 4 per cent . The contract period is for a maximum of 25 years,” the company said.

The advantages are conservation of resource, effective substitution of imported coal for non-regulated sector with good quality coal locked up in these mines and provision of livelihood to the local communities where these mines are revived.

CIL said from the environmental point of view there would be no land degradation as the mining infrastructure is already in place.

“CIL is also identifying a few more mines for the purpose to attract wider participation with bid norms relaxed. On the total quantity of coal sold exclusively for coal gasification or coal liquefaction purpose in a year, a 50 per cent on contracted percentage of revenue share of the authority will be provided to the operator.

The successful bidder or the mine operator to whom the mine shall be handed over on “as is where is” basis, can also utilize the existing infrastructure and project facilities without any additional payment to the authority.,” according to the filing.

In case of a consortium, foreign bidders are allowed to participate as second or third members of the consortium, as per Government e Marketplace (GeM) portal. The mine operator shall act as the agency responsible for selling coal mined from these mines at market driven price through an auction process on behalf of the authority.

They shall have the freedom to adopt their preferential method of technology and deployment of mining machinery to extract coal from the mines.

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