Public sector diversified mineral resources company, NMDC, is planning to induct a foreign partner in its proposed joint venture for thermal coal in West Bengal, and has held talks with Rio Tinto, the world’s second largest mineral company.
Rana Som, chairman and managing director of NMDC, said, “We would look at technology and cost. We have held talks with Rio also, but ultimately it will be a commercial decision.”
The coal block in Birbhum, West Bengal, is among the five largest mines in India with estimated reserves of around two billion tons. The initial investment is pegged at Rs 1,000 crore.
NMDC already has a memorandum of understanding (MoU) with Rio Tinto for a joint venture aimed at developing mines in the domestic and overseas markets.
Som said, the coal block would involve huge overburdening in the first phase and for that part Rio would not be required.
NMDC today signed an MoU with the West Bengal Mineral Development & Trading Corporation (WBMTDC), for exploring and developing the Deocha-Pachami block covering 9.7 square km.
Som said, initially work would begin on 3.3 square kilometre, which would have reserves of 450 million tons and a depth of 100 metres.
The joint venture company would be formed once the coal block was allotted.
NMDC would have 50 per cent while the WBMDTC would have 40 per cent and another 10 per cent would be with West Bengal Power Distribution Company Limited.
NMDC has the right to dilute up to 15 per cent of equity.
With this move NMDC, India’s largest iron ore producer and exporter, was making a major foray into thermal coal mining.
Earlier NMDC had been allotted two coal blocks in Madhya Pradesh but those were much smaller.
Som said, NMDC was interest in bulk mining like iron ore and coal and had decided to embark on bauxite mining as well. “NMDC has applied for lease in Jharkhand,” he said.
NMDC today signed an MoU with the Bengal government for offtake agreements from new iron ore and bauxite mines of the PSU.
Apart from diversifying into coal and bauxite, NMDC has also entered into a joint venture with Rashtriya Chemicals & Fertiliser for rock phosphate mining.
“We have started work in Jordan, Tunisia and Syria and have already bid for exploration. India is a net importer of 95 per cent of rock phosphate.”
