Coal India has decided to engage mine developers cum operators (MDO) to unlock 168 million tonnes of coal every year from a total of 15 greenfield projects of which 12 are opencast and three are underground.
The projects are spread across subsidiaries with Mahanadi, South Eastern Coalfields and Central Coalfields stated to form major segments for the MDO mode with annual targeted capacities of 65.5 mt, 52.4 mt and 45 mt, respectively. Eastern and Northern Coalfields will have projects with targeted capacities of 3 mt and 2 mt per annum, respectively.
Tenders have already been floated for two projects — Siarmal Opencast of MCL (40 mt/year) and Kotre-Basantpur Pachmo of CCL (5 mt/year). Tenders of five projects with a combined capacity of 68 mt/year will be floated in the current fiscal and the tender for the remaining eight would be floated in 2021-22.
According to Coal India officials, the miner plans to bring in MDOs of international repute through global tenders with an objective of excavation, extraction and delivery of coal to the subsidiaries of Coal India. The board has given its nod to a standard bid document and has requested for bids to engage MDOs.
The contract period would be for 25 years or the life of the mine, whichever is less.
Officials said the engagement of MDOs would bring the advantage of advanced technology and operational efficiency.
Among the key challenges of the mining segment in the country at present is land acquisition, relocation and rehabilitation, environment clearances and coordination with pollution control boards.
The MDOs will have to facilitate these besides development of allied infrastructure.
According to a study by KPMG, the market size of the overall coal contract mining in 2017-18 was around Rs 15,000 crore, comprising business by mine contractors, MDOs and active mine managers. With the government looking to open up the mining sector, the industry size is estimated to grow to Rs 61,000 crore by 2029-30 with MDOs securing the major share of the business.
The report said that among the large MDOs in the country are Adani Enterprises, Essel Mining, Sainik Mining, Thriveni, Ambey, BGR, NCC, VPR and Dilip Buildcon.
Industry observers, however, said that MDOs today are facing the same challenges that the government owned miner itself faces. These include delay in obtaining statutory clearances, land acquisition and rehabilitation and resettlement. Moreover, MDOs are wary of the fact that government regulations are prone to change anytime and financial institutions are often unwilling to lend due to past experiences where blocks allotted were cancelled and policies were changed.