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Coal India to invite bids for abandoned mines again

BS Reporter  |  Kolkata 

(CIL), the government’s near-monopoly producer, is planning to again try to interest major firms, here and abroad, into reviving some of its abandoned mines. Its first attempt, in 2008, finally had no takers.

The idea was to develop 18 abandoned underground mines, with estimated reserves of 1,600 million tonnes of coking and thermal coal, under joint ventures with international players. “After a pre-notice inviting tender (NIT) meeting with the shortlisted parties, the government had approved the model NIT document. However, in the first round of limited tendering, none of the shortlisted parties responded. We are looking to go for a second round of tendering in another two months,” said N C Jha, chairman and managing director, on the sidelines of the firm’s 37th annual general meeting here on Tuesday.

This was the first AGM of the company after its initial public offer got it listed on the Bombay Stock Exchange. The firm had invited expressions of interest from global mining giants in 2008 for abandoned mines owned by three subsidiaries — Eastern Coalfields, Bharat Coking Coal and Central Coalfields.

According to reports, the shortlisted firms during the first round included ArcelorMittal, Rio Tinto, Reliance Natural Resources, JSW Steel and Essar Steel. The mines had been abandoned for reasons related to a lack of safety measure and the technology to develop those.

Output suffered a shortfall of 16 mt during August and September. “We had an internal target of 452 mt, while the expected target is 431 mt. But these figures may be affected due to heavy rains in Orissa, Jharkhand and some mines of ECL in West Bengal in the recent months. We are looking to make up for that in the coming months,” said the CMD.

To meet the rising demand in the domestic market, it is ready to look for further acquisitions abroad.

“Steps are taken to activate Africana to take up exploration activities in holding coal blocks and to look for further acquisitions in Mozambique. We are also looking into Indonesia, if we get good quality coal at a cheaper rate,” Jha said, answering a shareholder’s question. The firm’s foreign acquisition plans are yet to get clearance from the finance ministry.

West Bengal chief minister has promised the public sector undertaking on steps to tackle illegal mining and coal pilferage at some of its blocks in the state. “I had a meeting with the chief minister recently. We are also taking steps, with the help of other state governments and the central government to tackle this issue,” Jha said.

Illegal mining in the Durgapur-Asansol belt is a major concern for ECL, which is already being looked at by the Board of Industrial & Financial Restructuring. Meanwhile, the firm’s stocks were up 0.6 per cent to Rs 378.25 at on Tuesday’s close, as against the previous close of Rs 376.55.

First Published: Wed, September 21 2011. 01:10 IST