State-owned coal miner Singareni Collieries Company Limited (SCCL) is looking for prospective partners for contract mining through its cost-plus project scheme.
Under the scheme, SCCL will develop a mine and then give it on contract to private miners. The coal coming out of this mine will be shared equally, according to SCCL director S Narsing Rao.
Speaking to the media on Thursday, he said SCCL would opt for private partners for those mines where the cost of production was more than the present sale price. The company is building up the concept on the premise that the demand for coal would rise and mining from these mines, though would be slightly costlier than other mines, would still work out cheaper to import.
The demand-supply gap of coal is expected to be around 11.5 million tonne by 2016-17. SCCL has identified six mines – Javaharkhani and Koyagudem in Khammam, Kakatiyakhani in Warangal and Chennur (I and II) and Ramakrishnapur in Adialabad districts – for contract mining, he said, adding that it the company would also appoint a consultant for this purpose. “These are difficult mines but there is coal potential in them,” Rao said.
SCCL is going in for contract mining to minimise the production costs. Each mine would need an investment of about Rs 600 crore. The company is expecting the guidelines for giving the mines on contract to be ready by the end of this year.
Incidentally, state-owned power producer APGenco had earlier asked SCCL to excavate coal from the Tadicherla mines on its behalf. Now, SCCL is asking a private miner to mine the coal on a cost-sharing basis.
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SCCL had already initiated a similar project on a pilot basis in Warangal and two bidders have been shortlisted, which are expected to file their bids in about two months. Here, SCCL would pay on a per tonne coal-mined basis, he said.
During the 2009-10 financial year, SCCL had produced 50.42 million tonne, recording a 13 per cent growth over last year. It dispatched 49.27 million tonne and the remaining would be dispatched in a month. The dispatch was delayed as the operations were hit due to the recent agitations for and against bifurcation of the state.
SCCL supplied 14.97 million tonne to APGenco, as against the fuel supply agreement for 10.08 million tonne. The additional coal supply helped APGenco to save to the tune of Rs 212 crore, the additional cost it could have incurred if it sourced the coal from Mahanandi or other coal fields.
The company, which in 2009-10 incurred an expenditure of Rs 650 crore, is planning to invest about Rs 1,334 crore during 2010-11, including providing Rs 540 crore for setting up a 600-Mw power plant. Its gross revenues and profit after tax last year stood at Rs 7,500 and Rs 160 crore respectively.