MSMC eyes 8 Vidarbha coal blocks

The Maharashtra State Mining Corporation (MSMC) has identified eight coal blocks in Nagpur, Wardha and Chandrapur districts for undertaking mining operations.

These blocks were explored by the state's directorate of geology and mining (DGM) over the last five-six years with an estimated reserve of 250 million tonne, sources disclosed, adding the coal is of 'D' and 'E' grades.

This will be the first coal mining operation to be launched by MSMC which has recorded profits for the first time in FY05 since its inception 15 years ago.

MSMC plans to take a joint venture partner with adequate coal mining experience for this purpose.

Last week, it issued advertisements seeking expression of interest from such parties. Preference will be given to industries with plans for captive mining of coal. MSMC has received several inquiries from across the country, sources said.

Earlier, coal mining was the exclusive domain of Coal India Ltd. A 1999 amendment to the Coal Mines (Nationalisation) Act, 1973, changed that, allowing private entrepreneurship in the sector. MSMC has written to the Centre to grant it the lease for the eight coal blocks.

It is banking on Mineral Conservation and Development Rules which says that a state government undertaking can exploit mines explored by that state's DGM, sources said.

MSMC is hopeful that it will get the lease rights. MSMC plans to hold 26 per cent stake in the joint venture by virtue of holding the lease. Its partner will be asked to match capital infusion accordingly. These details will be sorted out through discussions, sources said.

MSMC owns seven mines, all of which are in Vidarbha. These are Pohra sillimanite mine, Gadpendhri sillimanite mine, Navargaon Chova kyanite mine (all in Bhandara district), Patgawri dolomite mine (Nagpur district), Gaurala limestone mine (Yavatmal), Dongargaon fluorite mine (Chandrapur) and Khursipar iron ore mine (Gondia).

In addition, it has sub-leased two mines in Sindhudurg district-Fondaghat silica sand mine and Kadawal feldspar mine.