The world’s largest coal producer Coal India Ltd (CIL) will go slow on underground (UG) mines as there is a drop of about 1 million tonne in production from these mines every year.
Out of the total 467 mines, the company has 273 underground mines, 164 open cast mines and 30 mixed mines. “Though we have 273 UG mines, during the last financial year, those mines contributed only 38.39 million tonne out of our total production of 435.84 million tonne, which is below nine per cent,” said a top company official.
When asked about its strategy on UG mines, the new chairman and managing director S Narsing Rao said, “Underground mines have a negative growth trajectory. Every year, there is a decline in production by about one million tonne in a secular basis. I don’t know whether we can arrest this decline. If we have to go for mass production strategy depending on demand, then open cast mines should be the option.”
CIL had invited expression of interest from global mining giants for the first time in 2008 for 18 abandoned mines owned by three subsidiaries — Eastern Coalfields, Bharat Coking Coal and Central Coalfields. After a pre-notice inviting tender (NIT) meeting with the shortlisted parties, the government had approved model NIT document. However, in the first round of limited tendering, none of the shortlisted players responded. Those who were shortlisted during the first round, included ArcelorMittal, Rio Tinto, Reliance Natural Resources, JSW Steel and Essar Steel.
Earlier this year, Bharat Coking Coal was reportedly going to open seven new underground mines in Jharkhand, including Putki Balihari, Kapuria, Madhuban, Moonidih (15 seam and 16 seam), Amlabad and Sumandi in Dhanbad area. In 2010-11, it’s contribution from UG mines was a mere 4 million tonne.
“Reopening of those mines were mostly planned in Bharat Coking Coal. Though from a technology point of view UG mines should be maintained, the quantity they offer is just one or two million tonne. None of those mines have a capacity of more than two million tonne, which would not add hugely to our production target,” Rao said.
In 2011-12, the company produced only 435.84 MT showing a one per cent rise from the 431.32 MT in 2010-11. However, it has set a target of about 464.1 MT for the current financial year. Rao expressed hope that the firm will be able to meet the target. But the major constraints for the company would be the new fuel supply agreements. If they sign the agreements with power companies, CIL said that at least 70 projects need environment clearances that have a capacity of about 196 MT.
