Coal India Limited (CIL) will invite tenders for proposed joint ventures to extract coal from abandoned mines by the end of August. It has shortlisted 10 parties for participating in the tenders, and is likely to start extraction by middle of 2010.
The parties shortlisted are said to be Arcelor Mittal India, Rio Tinto, Titan Mining, JSW Steel, Monnet Ispat, JSW Energy, SNT Mining, Essar Mineral Reserves, GVK Power & Infrastructure and Sunflag Iron and Steel.
CIL chairman Partha S Bhattacharya said, “Early last week, we had a meeting of the parties shortlisted… The notice inviting tenders (NIT) for the proposed JVs will be floated by next month, following which, we would give four months for submission of bids. By December, all bids would be in place and by middle of next year, the JVs would start operating.”
CIL has offered 18 abandoned mines with a total estimated reserve of 1,647 million tonnes from its three subsidiaries.The abandoned mines of Eastern Coalfields include
Sangramgarh, Seetalpur, Kapasara, Shyampur A, Sripur and Girimint.
Bharat Coking Coal has eight abandoned mines, at Dharmaband, Gastilan, Industry, Kendwadih, Kustore, Kujore, Victoria and Begunia. Central Coalfields has four mines — Hindegir, Associated Karanpur, Khas Karanpura and Papradih.
Bhattacharya said that reviving the 18 abandoned mines, developing seven large underground mines and 18 coal beneficiation (washing) plants are part of the company’s strategic expansion programme.
Meanwhile, the coal major is contemplating a price rise soon to shore up profits. The company posted a decline of 60% in net profit at Rs 2078.69 crore in 2008-09, from Rs 5243.27 crore in the previous fiscal.
“Costs have gone up and there is a government understanding that CIL needs to protect its topline and bottomline. Over the last nine years, our prices have been moderately increased. There is a huge volatility in global prices and we certainly need a hike in coal prices,” Bhattacharya said. CIL’s wage bill for FY09 was Rs 8,349 crore.
On the production front, CIL plans increase production to 435 million tonnes by 2009-10, a growth of 7.7% from the current 403 mt. In the first quarter of this fiscal (ended June), it posted an 11% growth in production at around 96 mt.
CIL will shortly introduce forward e-auction, which is largely selling the coal from mines which are operating at a loss. As per the New CoalDistribution Policy, 10% of coal can be sold through e-auctions (spot and forward combined). CIL hopes to sell about 43 million tonnes through the e-auction route.
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