Coal India Ltd (CIL) has decided to float tenders for second round of bidding for abandoned mines, though the successful bidders of the first round have backed out from all the 18 projects.
CIL in 2008 decided to open 18 abandoned mines with reserves of 1,600 million tonne and accordingly completed the bidding process in 2009. Although the bidding process was successful and it was envisioned that the production would start from mid 2010, the projects didn?t take off.
CIL chairman NC Jha after the company?s 37 th annual general meeting said that the projects didn?t take off as bidders didn?t find it economically viable. The companies that were shortlisted in the bidding were Arcelor Mittal India, Rio Tinto, Titan Mining, JSW Steel, JSW Energy, Monnet Ispat, Essar Mineral Reserves, SNT Mining and Sunflag Iron & Steel.
? We gave a condition of lifting coal at 90% of the notified price. But most mines didn?t work out to be remunerative since the coal available in those mines were not of higher grade,? Jha said.
He said the bidders found investment to be very risky because CIL abandoned all the 18 mines for safety reasons.
Ensuring safety there meant heavy investments and returns were not certain.
But CIL would go for another round of tender, modifying the bid documents. This time it would be the subsidiaries that would float the tenders, Jha said adding that the tenders would be for 14-15 mines.
The abandoned mines that CIL offered were in three subsidiaries ? Eastern Coalfields Ltd (ECL), Bharat Coking Coal Ltd (BCCL) and Central Coalfields Ltd (CCL). But BCCL has already withdrawn 3-4 mines from bidding, Jha said.
He said the subsidiaries might ask for EOI for the second round of bidding in the next two months.