The Government has asked Coal India Ltd to identify at least six ‘big-size’ mines, which would be offered under public-private partnership (PPP) contracts, in the current fiscal. These contracts are targeted to attract global miners such as BHP Billiton, Rio Tinto and Xstrata.

“These mines would be offered at quote per tonne basis. Coal India has been asked to identify mines with at least 10-15 million tonnes a year capacities,” a Senior Coal Ministry official told Business Line .

PPP model Under the PPP model, drafted by the Coal Ministry along with the Planning Commission, Coal India would support the private company with requisite clearances such as forest, environment, land acquisition and rehabilitation. Generally, the life of a mine would vary between 20 and 25 years, wherein the mine developer would pay per tonne cost to Coal India.

The private partner may be selected through a bidding process. The Coal Ministry is currently working on the modalities. At present, foreign investment in the coal sector is negligible. Industry watchers say contract mining is one of the ways to involve foreign companies. Mid-sized companies may be interested in Mine Developer and Operator (MDO) contracts. However, global mining companies do not engage in such contracts.

Sharing risk “If risks are equally covered and shared, foreign players would come ahead. PPP projects would be on the turnkey model starting from developing a new mine till transporting coal to loading end,” the official said.

>siddhartha.s@thehindu.co.in

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