CIL invites fgn players for underground mining

Government-owned coal mining major Coal India Ltd (CIL) has initiated the process of inviting foreign players to explore and operate underground coal mines in the country.

To start with, CIL has identified five coal blocks which would be offered to these players for underground mining "" two under Eastern Coalfields and one each under Western Coalfields, Bharat Coking Coal and Mahanadi Coalfields.

"Underground mining is a very expensive and technically complex method for which Indian companies have neither the resources nor the technology," said a senior CIL official.

CIL would invite expressions of interest to outsource these five blocks by April next year. It is expecting a favourable response from large foreign firms like DBT, Joy mining and BHP Billiton.

"These companies had expressed an interest to come to India," said a CIL official.

Underground coal accounts for mere 13 per cent of total coal produced in the country, with rest being mined from open cast mines.

CIL produced 43 million tonnes (MT) of coal from underground mining in 2006-07 (out of the total production of 360 MT), and has a target of increasing it to 55 MT in 2011-12 and 57 MT by the end of 2017.

In order to meet the increasing demand from a fast-growing economy, the government wants to explore underground mines together with open cast mines so that the gap between demand and supply of coal is narrowed.

Despite being a coal-rich country, coal imports have been rising because the production has failed to keep pace with demand.

One of the reasons for this is that CIL companies have not gone deeper than 200 metres to mine the coal. CIL is also planning to outsource coal prospecting to companies overseas.