Coal India plans methane projects in five blocks

In another development, Coal India is venturing into production of a new age clean fuel called coal-mine methane (CMM). The near-monopoly coal producer has selected five mines to set up CMM projects for which it has invited application from developers.

CMM is methane gas released during coal mining while coal-bed methane remains trapped in coal seams which is mined separately.

This marks yet another attempt by Coal India to make its presence felt in environmentally cleaner energy after foraying into extraction of coal-bed methane gas and plans for ventilation air methane and underground coal gasification project.
Coal India plans to produce CMM in the blocks Moonidih, Pootkee Bulliary and Mahuda sub-basin under subsidiary Bharat Coking Coal Ltd and North Kathara-Uchitdih and Asnapani-Jarangdih under Central Coalfields Ltd — all located in Jharkhand.

Coal India would accept applications from prospective developers till June 15 and bids would be opened on that day.

As per the model development contract, developers would have to complete feasibility study within two years from the date of awarding of contract, and then would be allowed to mine and produce CMM for a period of 25 years.
The applicant should have a minimum net worth of Rs. 200 crore.

The developers would be compensated through revenue sharing and would be free to market the CMM but only in the domestic market.

Fresh investments for coal washeries

Coal India managing director NC Jha, said Coal India has planned 20 washeries at an investment of around Rs. 2,500 crore, with a capacity of 111 million tonnes. However, the new plan will see Coal India now invest another Rs. 3,500 crore on more washeries, he said.

Out of the proposed 20 washeries, a small number will serve major clients that are far from the mines or production areas and customers who are small players close to the mines but have been left out, indicated Jha.

Accordingly, Coal India has already floated tenders for five of the washeries and work has been awarded for three washeries. Out of the three with work clearances, one has already attained environmental clearance as well. These 20 washeries will be set up over a period of 2.5-3 years, said Jha.

Jha noted that Coal India produces 431 million tonnes currently, of which 10 per cent is sold through e-auction; barring rest has to be washed and sold. Coal India expects these washeries to help the company increase the quality of coal which the company offers and will also help get better prices.

According to Jha, the company’s products are 50 per cent cheaper than imported coal and CIL has the scope to increase the price.

However, the industry estimates have placed coal washeries to be a $5 billion opportunity in India. According to Jha, the present capacity for washing coal in the country is 130 million tons, mostly with the private operators, and utilization is around 40 per cent only.

Coal India projects are to come in the states of Assam, West Bengal, Jharkhand, Orissa, Chhattisgarh, Uttar Pradesh and Maharashtra. The company has also decided to set up washeries at new plants for a capacity above 2.5 million tonnes.

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