Saturday, August 14, 2010

Coal India to step up output from underground mines

Coal India Ltd (CIL) plans to boost output from its underground (UG) mines and is in the process of selecting global mining firms as technology partners to restart some 18 abandoned mines as joint venture initiatives. The underground mines accounted for a tenth of CIL's total raw coal output of 431 million tonnes in fiscal 2010

“We intend to focus on increased production from our underground mines, including large reserves below 300 meters depth, by deploying advanced production equipment and technologies,” Coal India said in its draft red herring prospectus filed with the Securities and Exchange Board of India for its forthcoming initial public offer (IPO). The Government is divesting 10 per cent stake in Coal India consisting of 631 million shares through the IPO.

Of the 471 mines that CIL operated as of March 31 across eight States, 273 were underground mines and 161 were opencast mines, while the remaining were a combination of both underground and opencast.

In the current fiscal, CIL has earmarked a capital expenditure of Rs 659.6 crore towards the acquisition of equipment for underground mines.

Further, CIL has entered into a joint venture with Damodar Valley Corporation (DVC) and BEML for the acquisition of the assets of Mining and Allied Machineries Corporation (MAMC) at Durgapur for manufacturing a range of mining equipment specifically for underground mines. CIL and DVC hold 26 per cent equity interest in MAMC, while BEML owns 48 per cent stake.

Coal India has also identified and proposes to re-work mining operations at 18 underground mines that were abandoned in the past primarily because of safety issues and lack of adequate technology. It is in the process of scouting for joint venture technology partner to restart these mines.

Dedicated berths

Further, it is also evaluating proposals for the development of dedicated berths for coal unloading facilities at the Visakhapatnam port.

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