Coal India awards 23 discontinued underground blocks to private miners

State-owned Coal India on Wednesday said it has awarded 23 discontinued underground blocks to private miners through an auction route on revenue sharing model.

The cumulative peak rated capacity of these mines is 34.14 million tonnes per year while the total extractable reserves are estimated at 635 MT, the miner said in an exchange filing.

"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," it said.

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.

Hence, the company said it 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 the company.

"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 per cent. The contract period is for a maximum of 25 years," CIL said.

This will help in the conservation of resources, effective substitution of imported coal for the non-regulated sector with good quality coal locked up in these mines and provision of livelihood to the local communities where these mines are revived.

Further, there would be no land degradation as the mining infrastructure is already in place.

CIL is also identifying a few more mines for the purpose of attracting wider participation with relaxed bid norms.

Of the 34 identified mines, the West Bengal-based Eastern Coalfields Ltd and Jharkhand-based Bharat Coking Coal Ltd account for 10 each. Western Coalfields Limited (5 mines), South Eastern Coalfields Ltd (4), Mahanadi Coalfields Ltd (3) and Central Coalfields Ltd (2) add up the remaining.