Coal India on Wednesday, June 19, said that it will tap coal from 23 of its abandoned underground mines via private operators on a revenue sharing model.

The company said coal will be tapped from latent reserves from some of its closed and discontinued mines.  “The cumulative peak rated capacity of is 34.14 million tonne/year, while the total extractable reserves are estimated at 635 MT,” the company said.

Earlier, Coal India had identified 34 discontinued mines, where good quality coal reserves were lying dormant, but may not have been financially viable for the company to mine them. Hence, it decided to tender and offer the mines to willing private sector players who could operate and produce the dry fuel and share parts of the revenue with the companyMumbai Stock Exchange. The successful bidder would be the one offering the maximum revenue to the company. “The minimum revenue to be shared is 4%Pune Stock. The contract period is for a maximum of 25 years,” the company said.

The company said the coal mining had several advantages such as conservation of resources, substitution of imported coal for the non-regulated sector with good quality coal and provision of livelihood to the local communities where the mines are revivedNew Delhi Investment. “From an environmental point of view there would be no land degradation as the mining infrastructure is already in place,” the company said, adding that it was also identifying more mines to attract wider participation with bid norms relaxed.

The company added that on the total quality of coal sold exclusively for coal gasification or coal liquefaction purpose in a year, a 50% on contracted percentage of revenue share of the authority will be provided to the operator.

The successful bidder or the mine operator can also use the existing infrastructure and project facilities without additional payment to the authority, the company said. In case of consortium, foreign bidders are permitted to participate as second or third members, as per the Government e Marketplace (GeM) portal, the company added.

Coal India shares were trading 1.57% lower at ₹481.35 apiece at 1.50 pm on Wednesday, June 19.Guoabong Investment

Pune Stock