Australian companies may develop mines for CIL

At least two Australian mining companies have shown interest in developing mines for Coal India Ltd., which plans to harness the private sector for developing 13 greenfield projects with 65 million tonne annual capacity. The tender for this is expected to be floated by mid-January 2013, officials connected with the development informed. The draft notices inviting tender (NIT) is being readied and comments have been invited. The pre-NIT meeting is likely to be held soon, after which the global tender would be floated.

Mine development

It is learnt that quite a few Indian companies have shown interest in acting as mine development operators (MDO) for the projects. Two Indian companies want to implement these as joint ventures with two Australian companies — Thiess and Leighton. Theiss Pty Ltd, a mining and infrastructure company, already has an Indian subsidiary. Leighton is into contracts, mining, infrastructure and telecom and has an Indian subsidiary too.

The mine development operators (MDO) would be paid on a per tonne basis and are expected to facilitate the process of land acquisition and regulatory clearances. These problems are now holding up some 128 CIL projects with an estimated capacity of 337 million tonnes. CIL, which is facing problems in acquiring land and commencing greenfield projects, bills this initiative as a path-breaking one which will allow it to make headway during the current plan period.

Private sector

The game plan is to facilitate the projects through a private sector approach to project implementation, sources said. The capacity of these projects, varying between five and 10 million tonnes, are considered large and are spread over five CIL subsidiaries — Central Coalfields, Eastern Coalfields, Mahanadi Coalfields, South Eastern Coalfields and Western Coalfields.

The strategy has the blessings of the PMO. The Prime Minister’s Economic Advisory Committee Chairman, C. Rangarajan said that the public sector Coal India could harness the private sector as an agent to open up new fields and enter into contracts. “This should be done in a thoroughly transparent and efficient manner,” he said after identifying low coal production as an area of serious concern for the economy. CIL at present outsources around 45% of its total production (2012-13 output target is 464 million tonnes) to private sector operators who are roped in only for the opencast mines. If this move fructifies, then the proportion of outsourcing would increase.

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