Amid the slowdown in the global mining sector, Kolkata offers a lifeline to the mining equipment industry.
Top honchos of the world’s leading mining equipment companies, such as Caterpillar, Komatsu, Hitachi and P&H are in Kolkata to take part in pre-bid meetings (between December 6 and 8) for Coal India’s multi-billion dollar equipment purchase plan.
Though CIL officials are tight lipped, sources suggest that the world’s largest coal miner has decided to dilute a fraction of its $11-billion cash reserve to ramp up production by 180 million tonne in five years.
Long shopping list
A tender for acquiring 77 dumpers (trucks used for removal of over-burden material in opencast mines) of 190 tonnes each is in advanced stages of consideration.
Expectation is rife that tenders may soon be floated for the purchase of 30 more dumpers of 240 tonnes and nearly 15 wheel-dozers.
Also on the cards are the purchase of 70 dumpers of 190 tonnes, primarily for Northern Coalfields; 20 high-capacity 320-360 tonne dumpers for South Eastern Coalfields and Mahanadi Coalfields and 150-tonne dumpers for Eastern Coalfields.
As matching equipment, 30-56 cubic metre shovels (for filling the dumpers) should also be acquired. All purchases will be backed by a 11-year maintenance and repair contract (MARC).
Huge value
A rough estimation suggests that the equipment cost of such purchases would be in the region of $600 million (over Rs 3,000 crore). But this is small compared to MARC value, which will be decided through bidding.
For example, CIL awarded the last contract in 2010 for 240-tonne dumpers at Rs 24 crore each, including the MARC.
Accordingly, one may assume that the purchase of dumpers alone may cost CIL over Rs 5,000 crore, or $1 billion.
Marc a hot topic
Meanwhile, at least two equipment majors are pushing CIL to bring in major changes in its tendering norms.
American giant Caterpillar, for example, is not in favour of offering a service contract on dumper tyres (worth lakhs of rupees each). A Japanese major is also believed to have lobbied on the same ground.
“We discussed issues with them (CIL). We do not know if our proposals will be accepted,” a top Caterpillar official told Business Line .
Change in norms
But will the tender norms be changed to accommodate a few? Coal Secretary S.K. Srivastava, who had been advocating for “improving” the CIL tender norms to accommodate private players in the mining sector, said: “It’s to be decided by the company (CIL).”