State-owned Coal India is set to sign pacts with global companies this month to set up two washeries as part of its proposed Rs 4,000-crore project to reduce ash content of the domestic fuel.
"We are going to select global partners for setting up two washeries this month, while have invited bids for another about eight on build, operate and transfer (BOT) basis," Coal India Ltd (CIL) Chairman Partha S Bhattacharyya told PTI.
Washeries are set up to wash raw coal and reduce its ash content, thus improving its calorific value. The average ash content in Indian coal is 35-38 per cent and washing helps reduce it by 7-8 per cent.
The country's largest coal producer plans to commission 20 washeries with a capacity to wash 111 million tonnes of fuel by 2015 at an investment of Rs 4,000 crore.
"Prices of washed coal will go up. Average price of our coal is $20 a tonne. Washing would escalate its cost to $26 a tonne but also increase its calorific value. Similar quality of Indonesia coal costs $45 a tonne," he added.
Out of the proposed washeries, the navratna firm has floated global tenders for eight additional units. For the remaining, Bhattacharyya said, CIL will consider floating a single tender.
"Post-commissioning of the washeries, in long-term we aim to wash at least 50 per cent of our coal," Bhattacharyya said.
The company will make the capital investment for setting up the proposed washeries from its reserves as the navratna PSU is sitting over a cash surplus of Rs 30,000 crore.
"Capital investment for washeries will be made by us and we will provide all logistical support like land, water and electricity. The washery developer will develop washery and operate it for a certain time frame" he said.
Two of the washeries will be set up under the Eastern Coalfields Ltd, six under the Ranchi Central Coalfields Ltd, two under South Eastern Coalfields Ltd, five under Central Coalfields Ltd, four under Mahanadi Coalfields Ltd and one under Western Coalfields Ltd.
CIL, which is the world's largest coal company with an estimated 63 billion coal reserves, meets over 80 per cent of the country's dry fuel demand.
It has lined up a production target of 461.5 million tonnes for the current financial year.
