The Hindu Business Line : Coal India mulls new profit-sharing model

New strategy
Objectives are raising production and absorbing new technology
Coal producing companies told to identify `difficult' mines

New Delhi April 2 Coal India Ltd is planning to evolve a new commercial structure of profit-sharing with equipment suppliers with the dual objective of increasing production and absorption of new technologies.

Since preliminary experiments with such a model have yielded positive results, the company is now involving all its subsidiaries in the profit-sharing model to increase production in difficult underground mines, the company Chairman, Mr Partha Bhattacharya, told Business Line.

The company has already floated global tenders inviting consultants who would help frame the details of such commercial contracts with suppliers. Simultaneously, the coal-producing companies have been asked to identify mines for this purpose.

Explaining the model, Mr Bhattacharya said, "the equipment suppliers would have to provide certain guaranteed level of production and would have to be involved with us in the operations for the first couple of years. As and when the production exceeds the guaranteed levels, the equipment suppliers would have a share of extra profit arising out of the higher production in the form of incentives."

CIL has eight coal-producing subsidiaries, namely, Eastern Coalfields, Bharat Coking Coal, Central Coalfields, Mahanadi Coalfields, Western Coalfields, Northern Coalfields, South-Eastern Coalfields and North-Eastern Coalfields. Preliminary experiments were undertaken at the Chirimiri mines of South Eastern Coal Fields and the Tansi mines of Western Coalfields.

The company has started working simultaneously on both the fronts in order to speed up the whole process.

"While the subsidiaries would be identifying the probable mines where such an arrangement could be introduced, the parent company would engage itself in identifying the consultants who would take the process forward. We have invited expression of interests from global consultants," Mr Bhattacharya said, while adding that both the identification process could take around four to five months to be completed.

Once the mines are identified and the consultants are finalised, it would be for the consultants to shortlist the mines where the profit-sharing model would be introduced and equipments suppliers would be involved.

The shareable profit would essentially be the extra profit that could be generated by the equipment suppliers, as they would be involved with ground level operations.

The various equipment and technologies that the company plans to introduce in the Indian coal mining sector through this model include continuous miners, shearers, lump breakers, stage loaders, augur-cum-drilling machines, powered support longwall technologies and high wall mining technologies and some more, he said.

More Stories on : New Projects | Coal | Mining & Quarrying

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page