Several challenges would need to be tackled by the West Bengal government, which is currently in a euphoric mood after getting sole rights to mine the Deocha Pachami block in Birbhum district. It holds immense potential but needs some new thinking.
The State government had initially been nominated for this allocation along with six other States.
However, that model did not work and there was little progress on the project. Persistent follow-up by the State paved the way for the West Bengal government to be declared the sole allottee.
Chief Minister Mamata Banerjee has said the project would generate one lakh jobs and bring significant investments. But the project faces serious and unique challenges.
Deocha Pachami, with an inferred or indicated reserve of more than 2 billion tonnes, is among the biggest coal mines in the world. But it may also turn out to be the toughest to mine, due to the depth at which the deposits are believed to be lying (200-300 metres) and beneath layers of basalt rocks.
India does not have the technology to mine this deposit. “Huge exploration is needed as the reserves need to be proven,” said Rana Som, non-executive chairman, Bengal Birbhum Coal Company Ltd., the special purpose vehicle for this project, which has been allocated to the West Bengal Power Development Corporation Ltd. as its captive source. A sizeable quantum of land too may have to be acquired to develop this mine.
Coal-sector insiders felt this project cannot be implemented in a conservative, piece-meal manner of setting up a small mine just to mark its commencement.
The mine-capacity has to be large to ensure viability, since the initial investment including the cost of overburden removal till the coal seam is reached could be staggering. New mining methods and international expertise would be needed to develop the mine optimally.
Former Coal India Chairman Partha Sarathi Bhattacharyya said that at a time when the utility of coal as a fossil fuel is under threat, against dipping prices of renewable energy, the chances of using the Deoacha Pachami coal to feed power plants was limited, as West Bengal is a power-surplus State and export options are limited, by grid availability as well as competitive tariff.
‘Alternative use’
“One would need to think of alternative use for this coal,” he said, adding this may need either widening the scope of business of WBPDCL beyond power generation or creating a differ institutional mechanism to develop the block.
An international mine development operator, in consortium with an exploration agency, may have to be selected to carry out mining. For conversion of coal-to-oil or chemicals, established large plants operating in Sasole in South Africa, or in China, could be partners in a technology tie up.
Sasole mines 40-45 mtpa coal annually and converts it to produce a substantial amount of oil besides a large variety of chemicals. India depends on imports for such products.
