12 cos interested in reopening mines of Coal India

Twelve companies, including a host of national and international majors, expressed interest in re-opening underground mines in a 50:50 joint venture with Coal India Limited (CIL). Among the parties expressing interest till late Wednesday evening – the last day for submission of EoIs – are global steel and mining majors ArcelorMittal, Rio Tinto and Titan Mining (Australia). Indian majors who have joined the fray are Reliance Natural Resources, Sterlite, JSW Steel, Monnet Ispat, Essar Steel, a joint venture of SAIL and Tata group. Andhra Pradesh-based GVK power has also submitted an EoI. CIL has identified 18 abandoned mines — located in West Bengal and Jharkhand under subsidiaries Eastern Coalfields, Bharat Coking Coal and Central Coalfields — for redevelopment through the joint venture route. Four or five were coking-coal mines. Though proved unviable for CIL to continue operations, the mines reportedly have substantial quantities of coking and thermal coal reserves. According to the conditions set by CIL, the production of reopened mines should be sold to Coal India. However, the joint venture partner may enjoy the first right of refusal over 50 per cent of the coal production from the re-opened mines provided it is a captive user of the coal (like a thermal power producer for non-coking coal and steel maker for coking coal). “We are satisfied with the response. We sincerely hope that participation of the parties with proven track record will make this effort successful,” a CIL source said. Earlier this year, ArcelorMittal and Ispat group approached CIL with joint venture proposals for exploring the opportunity of re-development of abandoned mines on nomination basis. CIL avoided striking deals on nomination basis but saw an opportunity of making its closed assets — especially the coking coal assets — operational through such private participation. The company initially decided to invite EoIs for redeveloping 26 closed mines. The number was later reduced to 18.