Race to develop coal blocks

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By AMIT GUPTA
  • Published 1.11.11
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Ranchi, Oct. 31: Over 70 prospective bidders — including ArcelorMittal, Tata Steel, Jindal Steel & Power Limited (JSPL) and Rashtriya Ispat Nigam Limited are in the race to develop three coal blocks allocated to Jharkhand State Mineral Development Corporation (JSMDC) by the Union coal ministry.

Allocated between 2006 and 2008, Rabodh, Patratu and Pindra Debipur Khaowatand coal blocks are rich reserves of coking coal, which is of much value for the iron and steel sector.

“The response has been tremendous. All the big-ticket players are ready to bid to become joint venture partners to explore the coal blocks. The last date of submitting bid papers is November 25,” JSMDC managing director Arun Kumar Shukla told The Telegraph.

Shukla said over 70 companies have already purchased the bid documents priced at Rs 2 lakh for the Rabodh and Patratu coal blocks and Rs 1 lakh for Pindra Debipur coal block. The tender was floated on October 24.

Shukla added that by November 25, they are expecting more players to enter the bidding fray.

The successful bidder would be allowed to sell the coal for consumption for the local iron and steel industry.

Rabodh coal block is near Mandu in Hazaribagh district while Patratu is in Ramgarh district. Pindra Debipur is near Tenughat in Bokaro.

JSMDC sources said the capital cost to develop these coal blocks would be around Rs 1,100 crore. The capital cost for development of Rabodh coal block spread over an area of 5.85sqkm is around Rs 625 crore while for Patratu coal block, spread over 5sqkm, it is pegged at around Rs 250-300 crore. For Pindra Debipur coal block, spread over 3.56sqkm, the capital cost might run to Rs 250 crore.

Shukla added that joint venture partner would be responsible for exploration, obtaining approvals/clearances mandatory to start mining work, acquisition of land, rehabilitation of displaced population, financing, development, mining and selling of coal, operation and maintenance of the coal mine and even closure of mines after the deposits are exhausted.

JSMDC, whose track record has not been good so far as far as utilising the mineral resources of the state is concerned, has at its disposal eight coal blocks, including five major ones. Two others include Latehar and Jageshwar in Bokaro, and three smaller coal blocks in Ramgarh district.

A couple of months ago, the Union coal ministry had even served a notice to JSMDC for failing to develop the coal blocks within the stipulated time frame. JSMDC had replied that as the corporation was not functioning to its fullest capacity and a fluid political situation had led to delays in the projects.