Coal India Ltd (CIL), the country’s largest coal producer, has rejected global major Rio Tinto’s proposal for developing its abandoned and underground mines with total reserves of over 1,665 million tonnes of coal, saying the foreign company “falls short of expertise” to take up the venture.
“They (Rio Tinto) are a great company, but have not developed any abandoned mines. Their experience in underground mining and DPR also falls short of what our ‘Notice Inviting Tender’ (NIT) stipulates,” CIL Chairman Partha S Bhattacharyya told PTI.
Besides seeking a turnkey contract for the underground mines, Rio Tinto India had evinced interest in partnering with CIL for developing 18 abandoned mines, which have an estimated coal reserve of 1,647 million tonnes.
Rio Tinto India Managing Director Nik Senapati, when contacted for comment, said: “We participated in the EoI and are waiting for a decision to be made by Coal India.”
CIL, a Navratna PSU, plans to produce about 100 million tonnes of coal from its underground operations by 2016-17. The seven underground mines on offer by for revival possess about 20 million tonnes of coal.
Though the mines are to be awarded on a turn-key basis, Bhattacharyya said CIL will invest about Rs 4,000 crore in it.
CIL has already prepared NIT for the underground mines and is seeking comments from the nine short-listed companies out of the total 17. It is likely to float a tender for awarding the project next month.
Besides Rio Tinto India, the firms vying for the underground mines include Reliance Infrastructure, Indo Australian Mining and Bucyrus of Germany.
For the abandoned mines, being eyed by 12 corporate majors, including ArcelorMittal, Reliance, Sterlite, Essar and JSW Steel, the technical bids are under evaluation with Central Mining and Planning Development Institute.
All the 18 mines are spread across Jharkhand and West Bengal and falls under the jurisdictions of CIL’s subsidiaries like Central Coalfields Ltd, Eastern Coalfields Ltd and Bharat Coking Coal Ltd, a senior official in the PSU firm said.
