Coal India awards 23 abandoned mines on revenue sharing model to private players, extractable reserves estimated at 63.5 crore tonnes

The firm said the cumulative peak rated capacity stood at 34.4 million tonnes/year while the total extractable reserves are estimated at 635 million tonnes.

CIL said it had identified a total of 34 discontinued mines where good-quality coal reserves were lying dormant but it wasn’t financially viable for the firm to mine them.

“CIL has decided to tender and offer these mines to willing private sector players who are prepared to operate and produce the dry fuel and share part of the revenue with CIL. The successful bidder is the one who offers the maximum revenue to the authority,” it said. The minimum revenue to be shared stands at 4% and the contract period is for a maximum of 25 years.

Of the 34 identified mines, West Bengal-based Eastern Coalfields and Jharkhand-based Bharat Coking Coal possess 10 mines each. Western Coalfields (5), South Eastern Coalfields (4), Mahanadi Coalfields (3) and Central Coalfields (2) add up the remaining.

Coal India pointed out that such an arrangement has many advantages including conservation of resources, effective substitution of imported coal for the non-regulated sector with good quality coal locked up in these mines and provision of livelihood to the local communities where these mines are revived.

From an environmental point of view, there would be no land degradation as the mining infrastructure is already in place, the firm explained. Coal India is also identifying a few more mines for the purpose of attracting wider participation with bid norms relaxed.

Shares of the company have gained over 26% since the beginning of the year. The stock has gained over 112% in the last one year.