CIL awaits nod to raise coal from abandoned mines

In order to operationalise its plans to raise coal from abandoned mines through joint ventures with overseas companies, the public sector Coal India Ltd (CIL) has sought from its parent ministry, a special dispensation under the New Coal Distribution Policy (NCDP), for allowing the sale of coal from these mines.

Companies such as ArcelorMittal and Rio Tinto are keen to partner CIL’s efforts to reopen 18 mines, some closed since the days of nationalisation of the Indian coal industry. “This would give some pure mining companies their first opportunity to mine in India,” CIL Chairman P. S. Bhattacharyya said at a press conference held here to announce CIL’s highest-ever increase in first half year production.

He said the ten bidders, who would compete for the mines on offer, would bring technology, equipment, and funds on an equal basis with CIL, to restart operations. These mines were closed on grounds of safety or due to unviable operations. The dispensation is necessary, as most of the companies would be required to sell the coal to end-users for which the NCDP lays down a procedure (including signing letters of assurance).

Referring to efforts to strike ‘alliances’ with mining companies in the U.S., South Africa, Australia and Indonesia for commencing mining ventures there, Mr. Bhattacharyya said that of the 52 expressions of interest received by CIL, 45 were ‘good offers’. The companies will start making their presentation by December 2009. The CIL board is likely to finalise a format for this at its meeting on October 15. “This would be an effort at international outsourcing. Our effort will be to reduce coal imports (which stood at 57 million tonnes in 2008-09) while improving on the price of the coal that we bring in from these strategic alliances,” he said.

Mr. Bhattacharyya said that CIL had recorded its highest-ever first-half year increase in 2009-10, with an output of 184.44 million tonnes which was 9.9 per cent higher than the first half of 2008-09.

However, the profit before tax was 20 per cent lower at Rs. 3,600 crore, mainly due to the impact of wage revision which has not been neutralised by any increase in price as yet.