Biznextindia : Public sector coal miner Coal India Limited (CIL) has awarded 23 of its closed and discontinued underground mines to private sector bidders under a revenue-sharing model to harness latent coal reserves. These mines have a combined peak rated capacity of 34.14 million tonnes per year (MT/Y) and estimated total extractable reserves of 635 MT. Initially, CIL had identified 34 discontinued mines with good quality coal reserves that were not financially viable for CIL to mine. CIL decided to tender these mines to private sector players willing to operate them, produce the coal, and share a portion of the revenue with CIL. The successful bidder is the one who offers the highest revenue share to CIL, with a minimum share of 4%. The contract period can last up to 25 years.
The benefits include resource conservation, effective substitution of imported coal for the non-regulated sector with high-quality coal from these mines, and provision of livelihoods to local communities where the mines are revived. Environmentally, there will be no land degradation since the mining infrastructure is already in place. CIL is also identifying additional mines to attract wider participation by relaxing bid norms. For coal sold exclusively for coal gasification or coal liquefaction purposes, operators will receive 50% of the contracted percentage of the revenue share owed to the authority
The successful bidder or the mine operator to who the mine shall be handed over on “as is where is” basis, can also utilize the existing infrastructure and project facilities without any additional payment to the authority. In case of a consortium foreign bidders are allowed to participate as second or third members of the consortium, as per Government e Marketplace (GeM) portal. The mine operator shall act as the agency responsible for selling coal mined from these mines at market driven price through an auction process on behalf of the authority. They shall have the freedom to adopt their preferential method of technology and deployment of mining machinery to extract coal from the mines. Of the 34 identified mines, the West Bengal based Eastern Coalfields Limited and Jharkhand based Bharat Coking Coal Limited account for 10 each. Western Coalfields Limited -5, South Eastern Coalfields Limited -4, Mahanadi Coalfields Limited -3 and Central Coalfields Limited 2 add up the remaining.