To bid 45 blocks that are likely be awarded to MDOs, aims to bag 15 mines in 3 years
Adani Enterprises is eyeing a big chunk of coal mining contracts, which is an emerging business as the government opened up commercial coal mining to private companies this year. The conglomerate has set for itself an ambitious target of bagging not less than 15 out of the 45 blocks that are likely to get awarded to operators within the next three years.
In the near term, Adani is planning to bag some large mining contracts as many of the coal block owners are expected to finalise bids from the Mine Developer and Operators (MDO) for 7-8 blocks within six month's time, said Rajesh Agarwal, chief commercial officer, mining business, Adani Enterprise.
"We want to bid for around 45 blocks within the next 3 years' time out of which we have targeted to win 15 blocks. While more than 45 blocks might come, we have decided not to go for small ones, below 5 million tonne," Agarwal said on the sidelines of coal markets conference organised by Mjunction Services.
Country's largest power producer NTPC, which was earlier allotted eight coal blocks, is preparing itself to give three mines to mine developers within the next three months for which tenders have already been floated.
Following this, owners of several blocks of the Gare Palma cluster, which was the most sought after during the 2015 auctions, would finalise the mining contractors within the next six months.
State-owned power generation companies of Gujarat, Maharashtra and Chhattisgarh, owning blocks Gare Palma 3, 2 and 1 respectively, had earlier invited bids for MDOs, all of which are being aggressively eyed by Adani.
"We now have a clear visibility of six months' time by which 7-8 coal block owners would appoint operators, including three of NTPC - Talaipalli, Dulanga and Chatti-Bariatu – likely to get finalised in three months' time.
Another two important blocks, Gare Palma 2- and 3 would happen within another three month's time following by Gare Palma 1," Agarwal said, adding that Adani has bid aggressively for these contracts.
Adani currently has four mining contracts, of which the big three were given to it by Rajasthan state genco - Parsa East & Kente Basan, Parsa and Kente Extension - all of which are located in Chattisgarh and belong to a large natural mining area aggregating to yearly mining capacity of 27 million tonne.
These apart, Adani Enterprises is also working on group outfit Adani Power's Jitpur mine having a yearly capacity of 4 million tonne.
The opportunity for domestic mine developers has increased with the absence of foreign MDOs who are known for using state-of-the-art capital intensive and high productivity mining equipment.
"We don't see competition from foreign MDOs considering their risks perception of them operating in India, particularly after the Thiess Minecs arbitration case. None of the foreign companies has the appetite or the mindset to get into this business. Thiess tried but have gone away," he said.
Agarwal, in fact, has received proposals from foreign miners including those from China to act as sub-contractors but Adani hasn't shown any interest.
NTPC in 2014 had cancelled its MDO contract with Thiess Minecs citing delays in the development of Pakri Barwadih mine in Jharkhand following which the Australian mining company went in for arbitration proceedings.
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