Coal India to award revival contracts for abandoned mines in 2009-10

Coal India Limited (CIL) expects to complete the tendering process for revival and development of the abandoned coal mines, having reserves of about 1.6 billion tonnes, by the end of 2009-10.

The coal PSU was keen on developing the abandoned coal mines by forging joint ventures with other mining companies both domestic or overseas. However, the number of JV companies to be formed by CIL for revival of the abandoned mines was yet to be decided as the tendering process for short listing the companies was underway.

“CIL has received proposals from 12 companies in response to its expressions of interest invited for the revival and development of abandoned mines. The proposals of these 12 companies are being evaluated by Central Mine Planning and Design Institute (CMPDI), a subsidiary of CIL and a few companies would be shortlisted for forming JVs”, a top official of CIL told Business Standard.

“We expect to complete the tendering process for revival of abandoned mines by the end of 2009-10. The investment figure on revival and development of the abandoned mines located in the different subsidiaries of CIL can be known only after the shortlisted companies prepare their reports”, he added.

Meanwhile CIL is in the process of constituting a committee which would work out the modalities for developing the abandoned coal mines. The coal major’s thrust on revival of underground mines was aimed at scaling up coal production to meet the growing requirement of the raw material in the country. The demand for coal in the country is expected to go up to 720 million tonnes by 2012 and apart from scaling up its coal production; CIL was scouting for acquisition of overseas coal assets in countries like Australia, Canada and Indonesia to meet the domestic coal requirement.

CIL was recently awarded exploratory rights for two coal mining blocks in Mozambique with an estimated reserve of around one billion tonnes.