New Delhi, April 18: The cabinet committee on economic affairs (CCEA) has allowed Mahanadi Coalfields to outsource coal production in Bhubaneswari and Kaniah opencast projects in Orissa.

Mahanadi Coalfields can now proceed with the tenders for the two projects.

Post-expansion, the Bhubaneswari mine would produce 20 million tonnes per year of coal by 2014-15, science and technology minister Kapil Sibal said today. The Kaniah mine would produce 10 million tonnes per year after expansion in 2008-09, he said, adding the coal would be supplied to NTPC and state government owned thermal power stations.

In the Bhuwaneswari project, MCL will be allowed the “re-appropriation and re-phasing of sanctioned capital of Rs 336.68 crore within major heads in tune with the requirement for the enhanced production programme”.

The company has also been permitted flexibility in the implementation stage “within the approved cost estimates to respond to improvements in technology and equipment, which would result in improved profitability and productivity parameters”.

Similarly, in the Kaniah project, MCL has been given the approval for “rephrasing of sanctioned capital of Rs 96.18 crore within major heads in tune with enhanced production programme. Both Bhubaneswari and Kaniah opencast projects are situated in Angul district of Orissa.

MCL is a subsidiary company of Coal India, with its headquarters at Burla in Sambulpur district of Orissa.

At present MCL has 21 operating coal mines, including on-going projects with an annual capacity of 74 million tonnes per year in Talcher and Ib valley coalfields of Orissa.