Coal ministry sitting on a gold mine, plans uniform model for Coal India

State governments to rope in private miners to boost output

In an effort to ensure a uniform model for engaging private players in mining to boost output, the coal ministry would be coming up with a model mine development operator (MDO) agreement. Apart from Coal India Ltd (CIL), which would engage private players according to the new MDO model, this would also serve as a guideline for state government-run miners as well, for selecting private operators.

According to officials, the draft MDO model has already been prepared by the ministry in consultation with CIL and is currently waiting to be vetted by the law ministry. Following this, it would be put before the CIL board for approval before being used, a source said.

Engaging private contractors for mining is already operational in CIL under the MDO model, but is likely to be an expansion of the current model, to ensure greater participation from private players to boost CIL’s output. Under this, CIL might go for long-term mining contracts with private players on a turnkey basis.

“Awarding contracts to operators in the past few years under the MDO model was on piecemeal basis, and not on turnkey. Here, the miner would be handed over the mines for a much longer period, and would be awarded on a turnkey basis from production to transport till loading point,” an official noted.

MINE MODEL

• The draft MDO model has already been prepared by the coal ministry in consultation with CIL and is currently waiting to be vetted by the law ministry
   
• A PPP model for CIL to boost production was first mooted by the Planning Commission in 2012
   
• Later, then Union Finance Minister P Chidambaram, in his 2013-14 Budget pitch had pressed for the PPP model, with Coal India as one of the partners to ramp up domestic coal production