Open-cast mines brighten prospects for Central Coalfields

Ranchi-based Central Coalfields Ltd (CCL), since its launch in 1956 as the first State-owned coal miner, had seen a very slow pace of growth. Production grew just 4.7 per cent a year, from 3 million tonnes early on to 48 mt in financial year 2013-14.

Now, the Coal India Ltd (CIL) subsidiary is seeing a significant turnaround. Production grew 10 per cent last year to over 55 mt. And, in the first five months of this fiscal, it has grown nearly 16 per cent.

CCL sources attribute this production jump to the opening of two large open-cast mines — Amrapali and Magadh.

Opened in 2014, Amrapali has 12 mt approved capacity that may be expanded to 25 mt. Magadh has just started production, with an approved capacity of 9 mt per annum. The mine has the potential to produce up to 51 mt a year.

The evacuation front is looking good, too. Traditionally, CCL had the highest ratio of pithead stock to production due to poor evacuation logistics.

Even in 2014-15, a good part of the added production was dumped on pithead as off-take grew a mere 5.7 per cent. But this year, CCL recorded 13.7 per cent growth in sales, the highest among all CIL subsidiaries.

“CCL was never short of potential. But the lack of railway infrastructure restricted its growth,” a source told BusinessLine .

The nearest railway siding is 30 km from Amrapali. The distance is double for Magadh.

To develop a long-term solution, the Centre decided to build a 91-km rail line from Tori to Hazaribagh via Shibpur. The plan was approved more than a decade ago, but work started only two years ago.

The Narendra Modi government is now aiming to complete the first leg from Tori to Shibpur by 2016-end. Those in the know, however, expect it to take at least six months longer.

CIL, in 2012, prepared an alternative plan o strengthen the road infrastructure to carry coal to the railway siding in the vicinity.

The project is now taking shape, triggering a change in CCL’s fortunes.

CCL sources say they have reached a stage where mere availability of evacuation infrastructure can push up the company’s production by 30-40 per cent.

Till that happens, the company is restricting production at both Amrapali and Magadh to prevent a further rise in pithead stock.

The company is now producing 16,000 tonnes a day, or about 6 mt a year, from Amrapali. Improving road capacities may see the mine producing at double the rate by this year end.