Coal India to utilize coal from abandoned UG mines through private operators

 Coal India to utilize coal from abandoned UG mines through private operators

Coal India Limited (CIL) in a bid to tap the latent coal reserves of some of its closed and discontinued underground mines has awarded 23 such mines on revenue sharing model to successful bidders of the private sector. The cumulative peak rated capacity is 34.14 million tonnes per year while the total extractable reserves are estimated at 635 MT.

Earlier, CIL had identified a total of 34 discontinued mines where good quality coal reserves are lying dormant but may not be financially viable for CIL to mine them. CIL has decided to tender and offer these mines to willing private sector players who are prepared to operate and produce the dry fuel and share part of the revenue with CIL.

The successful bidder is the one who offers the maximum revenue to the authority, which is the coal company. The minimum revenue to be shared is 4%. The contract period is for a maximum of 25 years, as per the statement derived.

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The advantages are conservation of resource, effective substitution of imported coal for non-regulated sectors with good quality coal locked up in these mines, and provision of livelihood to the local communities where these mines are revived. From an environmental point of view, there would be no land degradation as the mining infrastructure is already in place.

The Coal PSU company also said it is identifying a few more mines to attract wider participation with bid norms relaxed. On the total quantity of coal sold exclusively for coal gasification or coal liquefaction purposes in a year, 50% of the contracted percentage of the revenue share of the authority will be provided to the operator.




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The successful bidder or the mine operator to who the mine shall be handed over on an “as is where is” basis, can also utilize the existing infrastructure and project facilities without any additional payment to the authority. In the case of a consortium foreign bidders are allowed to participate as second or third members of the consortium, as per the Government e-Marketplace (GeM) portal.

The mine operator shall act as the agency responsible for selling coal mined from these mines at market-driven prices through an auction process on behalf of the authority. The company stated that they shall have the freedom to adopt their preferred method of technology and deploy mining machinery to extract coal from the mines.

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