Coal India Limited revives closed mines through private sector partnership

In an innovative move to harness the untapped potential of dormant coal reserves, Coal India Limited (CIL) has awarded 23 closed and discontinued underground mines to successful private sector bidders under a revenue-sharing model. These mines collectively boast a peak rated capacity of 34.14 million tonnes per year (MT/Y) and hold estimated extractable reserves of 635 million tonnes.

This strategic initiative is part of Coal India Limited’s broader effort to reactivate a total of 34 mines identified for their valuable coal reserves, which had previously been deemed financially unviable for CIL to operate. The decision to open these mines to private operators is intended to maximize extraction and revenue, contributing significantly to India’s energy sector and reducing reliance on imported coal.

Successful bidders were selected based on their ability to offer the highest revenue share to Coal India Limited, with the minimum set at 4%. These partnerships are structured over a contract period that can extend up to 25 years, offering long-term operational stability for the private firms involved.

Coal India Limited is revitalizing dormant coal mines through a strategic partnership with the private sector.

One of the key advantages of this approach is the conservation of resources. By leveraging existing mining infrastructure, these initiatives prevent further land degradation and support environmental sustainability. Additionally, the revival of these mines is expected to provide substantial employment opportunities and economic benefits to local communities.

CIL’s strategy also includes incentives for coal gasification and liquefaction, with operators receiving a 50% reduction on the contracted revenue share percentage for coal sold exclusively for these purposes. This not only supports cleaner coal utilization technologies but also aligns with global environmental goals.

The private operators are granted the freedom to utilize the existing mine infrastructure and choose their preferred technology and equipment for coal extraction. This flexibility ensures that the most efficient and effective methods are employed to maximize productivity and profitability.

The distribution of these mines spans across several Indian states, with Eastern Coalfields Limited and Bharat Coking Coal Limited in West Bengal and Jharkhand respectively, contributing ten mines each. Other regions including Western Coalfields, South Eastern Coalfields, Mahanadi Coalfields, and Central Coalfields share the remaining mines, indicating a nationwide impact of this initiative.

Moreover, the inclusion of foreign firms in consortia, as allowed by the Government e Marketplace (GeM) portal, opens the door for international expertise and investment, further enhancing the project’s scope and potential success.

CIL’s initiative to partner with the private sector in reviving dormant coal mines is a significant step towards sustainable mining practices. By utilizing existing infrastructures and encouraging coal gasification, Coal India Limited not only addresses environmental concerns but also bolsters India’s energy security. This approach is a model for other nations looking to optimize dormant resources while minimizing environmental impact.