The Hindu Business Line : Coal India invites global majors to develop 7 mines

Mumbai, June 4 Coal India will award tenders for development of seven large mines to global mining majors in 15-20 days. It has already short-listed nine parties for the contract on build, operate and maintain basis.

Mr Partha S. Bhattacharyya, Chairman, said at a press conference here on Thursday that these seven mines were with Coal India subsidiaries and the documents were ready for the process.

The global participants would be awarded only ‘mining contracts’ and project investments would come from the company. The mining majors would stay on till guaranteed production was achieved.

ArcelorMittal interest

The coal major has also identified 18 abandoned mines, where reserves are estimated at over 10 million tonnes, for joint venture prospects with global partners. Coal India sought a global expression of interest after ArcelorMittal said it was keen to participate in the reopening of these mines. ArcelorMittal was among the bidders and at least a couple of joint ventures could be signed this fiscal, Mr Bhattacharyya said.

Listing soon

The conferment of ‘Navratna’ status on Coal India last October meant that the company would have to list on the exchanges in three years. It could be an initial public offering or disinvestment and “we are on the job”, he said, without giving a timeline. However, the listing would help as landowners could be given shares in lieu of a cash settlement.

Mr Bhattacharyya said wage revisions for (wage board) employees and executives in July 2006 and January 2007 impacted profits as Rs 12,103.31 crore had to be provisioned in 2008-09. A price revision would tide over the crisis, he conceded, while declining to commit when it could come by.

Coal India has bagged two coal blocks in Mozambique spanning 205 sq. km. Estimates indicate that reserves could be one billion tonnes with exploration expected to begin in six months. It is in the process of forging a joint venture with a company nominated by the Mozambique authorities. Other countries on its radar include Indonesia.

Ideally, according to Mr Bhattacharyya, Mozambique supplies could cater to western India and Indonesia to the eastern region.

Coal India is expected to produce 520.5 million tonnes (mt) of the country’s overall production plan of 680 mt by the end of the Eleventh Plan. It has identified 134 projects with an ultimate capacity of 308.94 mt annually, which will be taken up during the Plan period with an investment of Rs 26,006.68 crore.

Of these, 34 are underground projects of capacities totalling 23 mt a year with investments of Rs 4,665.47 crore. The balance are opencast of capacities amounting to 285.55 tonnes, totalling an investment of Rs 21,341.21 crore.

Of the 134 projects, 100 are likely to contribute to 123 mt by 2011-12. Nearly 65 have been approved and are in various stages of implementation.

Related Stories:
Coal India shortlists 9 cos for developing underground mines
Coal India eyeing one more block in Mozambique

More Stories on : Outlook | Coal | PSU

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