Coal India Ltd (CIL) is looking to procure mining equipments worth ₹12,000-13,000 crore in the next two to three years to ramp up its coal production to one billion tonne.

According to Anil Kumar Jha, CMD, orders (for equipments) worth ₹3,000-4,000 crore are likely to be placed this fiscal. The company had produced 567 million tonnes in FY18.

Jha was talking to newspersons on the sidelines of an MoU signing event between BEML and Heavy Engineering Corporation (HEC) held here recently.

“We expect to produce one billion tonne of coal in three to four years and this cannot be accomplished unless there is supply of indigenously supplied good quality machines,” Jha said.

CIL has earmarked a capex of ₹9,500 crore for this fiscal nearly 60 per cent of this will be spent on equipments, he added.

BEML-HEC tie-up

Under the MoU that was signed, BEML and HEC will jointly manufacture and supply equipments such as Rope Shovels and Walking Draglines to cater to the needs of the mining industry. This apart, the companies will also look after commissioning and providing after-sales service support for the identified products.

The collaboration in manufacturing of these mining equipment will help boost the turnover of both BEML and HEC by around ₹150-200 crore (on an incremental basis) each year, said Deepak Kumar Hota, CMD, BEML.

According to Avijit Ghosh, CMD, HEC, the mining industry has been growing and the demand for equipments is also on the rise. Currently, a majority of the demand is met through imports.

The tie-up will not help both the companies leverage their manufacturing capability, but will also help bring down delivery time, reduce working capital and create capability for high capacity equipment to meet the growing demand.

“There is a demand-supply gap and the dependence on imports is huge. The joint effort will not only help the country attain self reliance but will also help bring down costs," Ghosh said.

Both the companies are also exploring the possibility of getting funding from the Department of Heavy Industry for projects such as development of 20 CuM rope shovel.

Global standards

CIL has appointed the Central Mine Planning and Design Institute (CMPDI) to understand and assess how it can benchmark itself to global standards.

According to Jha, the Coal Ministry has asked the miner to benchmark itself against international parameters, particularly in certain areas such as in cost of production, quality, grade, equipment performance, unit cost of production and environmental concerns.

However, it may be difficult for Indian miners to adhere to global benchmark practices because of the differences in socio-political economic conditions, he pointed out.