Coal India plans to invest Rs 18,000 cr in 118 projects

Coal India (CIL) has ambitious plans of investing Rs 18,000 crore in 118 projects during 2008-09.

This would enable the company to augment its production by comprehensive margins. CIL projects a production of around 520 million tonne during the 11th Plan. Its current production is about 363 million tonnes which is expected to go up by over 384 million tonnes in 2008-09.

Speaking to reporters on the sidelines of a foundation stone laying ceremony of Mahanadi Coalfields, a prominent CIL subsidiary, P S Bhattacharya, chairman, CIL, said on Saturday, the coal behemoth's future thrust is on developing underground (UG) mining and other related development.

He said, "Mine development is also related to social and environmental sustainability issues. Neglecting the social and environmental aspects which primarily encumbers human units, mine development cannot progress. There is need to supplement the issues for achieving the targetted production."

As mining takes up huge land, rehabilitation and resettlement (R&R) of inhabitants stand out to be a problem. According to Bhattacharya, this has to be done bi-laterally or multi-laterally discussing issues with beneficiaries and satisfying them.

He says, "Nothing can be done unilaterally and foisted on the beneficiaries. We have to take them into confidence before taking over their lands and replacing them."

CIL is currently working out a R&R package on lines laid down by the national R&R policy.

According to N C Jha, director (technical), the 118 projects include development of a number of UG mines, open cast projects and washeries for enriched quality of coal that could meet global standards on ash content.

CIL projects to achieve 75 million tonnes of coal from its 290 odd UG mines during the next couple of years. While UG production in 1974-75 was in the region of 65 million tonnes, it registered a systematic fall over the next few years and came down to 43 million tonnes.

CIL figures reveal that of the 290 odd UG mines, 254 mines were in the red. The total loss calculated on UG production is Rs 3,084 crore. Recently, the coal giant recommended the closure of its 60 highly unremunerative and unviable UG mines.

Operating these 60 mines results in an annual loss of Rs 1,000 crore. The mines contribute a meagre 2.1 million tonne, accounting for 5.1 per cent of the present country-wide production of 43 million tonnes from UG mines. The losses incurred by the unviable mines is 33 per cent of the total loss of Rs 3,084 crore. The per tonne production loss suffered at these 60 mines is around Rs 3,000.

As huge coal is available at a depth of over 300 metres below the present seams, CIL plans to set up 5 new UG mines with capacities of 2-5 million tonnes. Around Rs 300 crore would be invested for each new UG mine.

The coal PSU is also entering into technical tie-ups with countries such as China and Australia for development of UG mines.

China and Australia are currently considered to be the best countries with UG know-how.

To carry out different coal mining ventures overseas, CIL recently entered into tie-ups with NTPC, RINL, SAIL and NMDC for setting up a special purpose vehicle (SPV), Coal Infrastructure Ventures (CIVL), for exploring overseas possibilities.

Said Bhattacharya, "We are looking at a number of nations such as Mozambique,Australia, Indonesia, Canada and Poland for future coal ventures. Currently, we are awaiting the government approval of empowerment on entering oversas ventures."