In an attempt to scale up supplies, Coal India is mulling part extraction of nearly 2-3 billion tonne reserves locked in existing and abandoned underground mines.
CIL produced approximately 40 mt from over 270 underground assets. Most of the assets are loss-making and located in Ranigunj-Jharia coalfield. Unofficial estimates suggest the company closed down over 100 such mines in the past.
The reserves are locked due to use of archaic “board and pillar” method. The process allows recovery of a mere 30 per cent of underground reserves.
“Not less than 2-3 billion tonne of coal (roughly four to six times the annual production of CIL and a little less than the annual production of China) are locked in underground pillars. Ideally, a part of it should be recovered with introduction of modern technology. I request you, individually or as an association, to come up with mine specific projects, to be sponsored by CIL, on coal recovery,” CIL Chairman S. Narsing Rao said on Friday.
He was addressing a seminar organised by the Indian School of Mines Alumni Association in Kolkata.
According to Rao, at a time when development potential of many new opencast mines are seriously constrained by non-availability of evacuation infrastructure, majority of such old mines are well connected by railways.
“It makes lot of sense to recover this coal, as there is ready infrastructure to transport it to consumers,” the CIL chairman said.
An old issue
Interestingly, in 2009, CIL made an attempt to re-open 17 abandoned underground mines – having high quality thermal and coking coal reserves – in joint venture with captive users. At least 12 steel and power majors submitted initial bids to participate in re-development of mines.
The initiative, however, fizzled out in the face of legal complications in allowing the JV partner to hold equal stake. Also joint venture partners were allowed to take the equity coal on payment of notified price (which is an import parity price for top grade varieties).
New model
Rao is aware of the past complications. And, he keeps his options open at this juncture. “Let us first draw an assessment of the recoverable reserves. Depending on the feasibility we may appoint contractors to outsource the production or go for public-private-partnerships (PPP),” he says.
The goal is clear. CIL fuelled a double-digit growth in thermal power generation in 2012-13 by supplying over 91 per cent of the contracted quantities.
“It is CIL’s responsibility to ensure double digit growth in thermal power generation during the rest of the Plan period (2012-17), else we will be failing the nation,” he said.