Coal news and updates

Narasing Rao, chairman and managing director (CMD) of Coal India, while attending a seminar organized by the Mining, Geological and Metallurgical Institute of India, in Kolkata, last week, met the press and told them that plans are afoot to invite bids to appoint miners for seven new coal blocks.The RFQ (request for qualification) is likely to be floated next week to short list miners to facilitate development of five open cast and two underground mines.

 

Eventually, Coal India hopes to develop 15 open cast and 12 underground mines, whose total production capacity, when in full operation, is estimated to be in the 40-50 million tonnes annually. Time frame has not been stated as a lot of work will still have to be completed.

 

 

 

It is gratifying to note that the entire process will be completed and contracts awarded, for these seven blocks, by March 2014. These seven blocks are estimated to achieve an annual production of 17-18 million tonnes. The actual development and production wholly depends upon the successful bidder and the speed at which he is able to obtain all necessary "clearances" to commence work at site.

 

 

 

It is expected that some foreign miners will also make bids this time, as this will enable them to offer advanced and technically superior mining equipments, some of which may not have been introduced to this market at all. Presumably, such equipments are already in use, successfully, at other mining areas in Australia and Europe/US. Some bids may be expected from UK and Poland also.

 

 

 

Since this will be a public-private partnership, some of overseas miners may be making the entry bids through their Indian associates, who may be fully conversant with the local conditions. At the end of the day, even though some advanced, state of the art equipments may be offered for use, in these new blocks, the fact remains that manpower requirements will have to be sourced locally.

 

 

 

What is of prime concern and importance is to go through the RFQ in an above-board and fair manner, award the contracts and lay down strict performance deadlines. Environmental issues are most likely stumbling blocks but in order to expedite the development, and reduce the dependence upon imported coal if the authorities were to tweak the rules, in a transparent manner, it may ease the situation.

 

 

 

Other factors, such as the nearest coal block in operation, details of existing railroads for logistical purposes, whether or not government owns the entire land covering the coal blocks, or part of which are privately owned, and the grades of coal that have been found on test drilling carried out, are important in expeditiously finalising the deals.

 

 

 

If Coal India can give further details on these blocks, it would be appreciated.

 

In the meantime, it would be of interest to know as if Coal India has any plans to rescue 3.5 million tonnes of coal lying in various ports, awaiting clearances, but the importers are reluctant to do so due to high rupee element cost, caused by the fall in value?

 

 

Source: www.moneylife.in