The US is trying to engage itself with the Indian coal-mining sector in a big way to tide over the fallout of the global slowdown on its mining equipment manufacturers.

The Indian coal-mining sector has remained upbeat since its entire production is meant for the domestic market and more so for the power sector, which is always scrambling for fuel.

The US consul general in Kolkata, Beth Payne, said the US commercial desk in the city was collaborating with various Indian industrial sectors to find out more opportunities for the US investors. She went for a visit to the Rajmahal mines under the Eastern Coalfields Ltd (ECL), a Coal India Ltd (CIL) subsidiary. ?Coal mining in India is an area with huge opportunities for the US entrepreneurs,? Payne said. She is the first ever US consul general in Kolkata to visit a coalmine.

According to a US consul official, with global mining giants like BHP Billiton, Rio Tinto and others slashing operations, demand for mining equipment has fallen drastically. India, at present, happens to be a major market for mining equipment with growth targets in production remaining intact. CIL has kept a target of producing in excess of 520 million tonne in the last year of the 11th Plan period, for which it has planned a capital outlay of more than Rs 18,000 crore. All the mining equipment supplying countries are scrambling to get a larger share of that pie.

CIL is targeting production of 405 million tonne for 2008-09. A company official told FE that out of the Rs 2,000 crore worth of equipment procured in 2007-08, the US had accounted 30% of the supplies.

CIL chairman Partha S Bhattacharyya said Bucyrus International Inc and Caterpillar Inc, the two US mining equipment majors, hit by the global meltdown, have bagged orders worth $400 million to supply shovels and dumper trucks to South Eastern Coalfields Ltd, to support the expansion of Rajmahal mines. While Bucyrus would supply three 42 cubic meters shovels, the largest size of shovels used in India, Caterpillar would supply 22 dumper trucks of 240 tonne each. The $400 million deal also includes a 12-year maintenance contract, Bhattacharyya said. Bucyrus has also tied up with the government-owned Bharat Earth Movers Ltd (BEML) for warehousing in India without which it will not be eligible to enter any supply contract.

Rajmahal mines, which supplies 50% of the ECL?s production, has planned to top up its production from the current 11.5 million tonne to 17 million tonne by 2012. ECL meets 10% of CIL?s total production.

SK Lahiri, chief general manager of ECL, said although BEML dumpers are the mainstay of Rajmahal operations, these dumpers work at 46% efficiency against the minimum requirement of 72%. This is where the US companies can come in. They can supply more efficient equipment to support CIL?s production target, an official said.

Digging deep

• Indian coal-mining sector has remained upbeat since its entire production is meant for the domestic market

• With global mining giants like BHP Billiton, Rio Tinto and others slashing operations, demand for mining equipment has fallen drastically world-wide

• CIL has kept a target of producing in excess of 520 million tonne in the last year of the 11th Plan period, for which it has planned a capital outlay of more than Rs 18,000 crore. All the mining equipment supplying countries are scrambling to get a larger share of that pie