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Coal India issues LoAs for seven coal projects through MDO

Thursday, 15 Dec 2022
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Coal India (CIL) has issued letters of acceptance (LoAs) for seven coal projects to be pursued through engagement of Mine Developer and operators (MDO). Cumulatively, these projects have production capacity of close to 100 million tpa.

The intent of engaging MDOs through open global tenders is to increase the domestic coal output and reduce import dependency to extent possible.

Of these seven projects, three belong to CCL, two to MCL, and one each to SECL and ECL.

Two of the projects, Siarmal open cast project (OCP) of MCL, Odisha having 50 million tpa output capacity and Hura ‘C’ OCP of ECL, West Bengal of 3 million tpa capacity are expected to start mining operations during the current financial year.

CIL is developing a total of 15 greenfield coal projects to mine coal through MDOs. CIL’s investment component would be to the tune of Rs. 20,600 crores largely spread on land acquisition, rehabilitation and resettlement issues. In some cases on railway sidings as well.

The contract period of engagement is for 25 years or life of mine whichever is less. Having total rated capacity of around 169 million tpa eleven of the total 15 projects, are opencast and four underground. While the capacity of OC projects is secured at 165 million tpa, UG projects add up to the rest.

The role of MDOs would be to excavate, extract and deliver coal to CIL’s coal companies in accordance to the approved mining plan. Ownership of the mines and coal rests with CIL. Sale of coal would be done by CIL. MDOs would bring to the table latest technology, bulk of the capex, economic viability and efficiency in operations for increased production.

Since contracts offered to them are on long-term basis, allied infrastructure at mine projects also would be developed by these private players. They shall facilitate R&R issues, land acquisitions, green clearances and coordination with State and Central Pollution Boards for fast tracking the required approvals.

Of the balance eight projects, LoA for two projects - Madannagar OCP (12 million tpa) and Pelma OCP (15 million tpa) of SECL will be issued shortly. The six remaining projects are at different stages of tendering.

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