CIL to invite 9 cos for developing underground mines

Kolkata: Coal India (CIL) may invite nine shortlisted private parties from India and abroad for turnkey development and long-term operation of high capacity underground mines in seven blocks, in a pre-bid meeting later this month. The projects, with an estimated annual production capacity of 3-5 million tonnes each, will be funded by CIL.

A total of 17 companies had submitted expression of interest in June, 2008. According to sources, the companies short-listed are: Walter South East Asia, Essel Mining, Anglo American, Reliance Infrastructure, Xeng Zhou Coal Mining Machineries Group, Essar Mineral Resources Ltd, Tiandi Science and Technology Ltd, Europe Ventures Ltd and Bucyrus DBT Europe GmbH.

The blocks which are proposed to be developed are Tilaboni under Eastern Coalfields Ltd; Kapuria of Bharat Coking Coal Ltd; Jagannath of Mahanadi Coalfields Ltd; Behraband and Khairaha under South Eastern Coalfields Ltd; and Murpar and Borda under Western Coalfields. Of the seven blocks, Kapuria in Jharkhand is a prime coking coal reserve.

Eastern Coalfields, Bharat Coking Coal, Mahanadi Coalfields, South Eastern Coalfields and Western Coalfields are wholly-owned subsidiaries of CIL.

The coal major will finance the cost of development (including creation of supply logistics) of the proposed mines and would enter into long-term agreements with the eligible parties for procurement of coal on operation cost-plus basis.

Preliminary estimates suggest that CIL may have to invest between Rs 600 crore and Rs 1,500 crore for development of each reserve.

While the draft document will be finalised following the pre-bid meeting to be held by the end of this month, sources reveal that the actual bidding process may take awhile. Since the reserves are located under different subsidiaries, the respective companies would need to take a series of board approvals to implement the project, allocate fund and customise the tender document to suit the quality of the particular reserve. The process is yet to begin.