Navratna PSU India Ltd (CIL) has rejected global mining giant Rio Tinto's proposal for developing its abandoned and underground mines, citing lack of required expertise to take up the project.

''They (Rio Tinto) are a great company, but have not developed any abandoned mines. Their experience in underground mining and DPR also falls short of what our 'notice inviting tender' stipulates," Coal India chairman Partha S Bhattacharyya said.

Rio Tinto India had evinced interest in partnering with CIL for developing 18 abandoned mines, which have an estimated coal reserve of 1,647 million tonnes, besides taking up turn-key contract for the underground mines.

CIL, the country's largest coal producer, plans to produce about 100 million tonnes of coal from its underground operations by 2016-17. The company is offering seven underground mines with reserves of about 20 million tonnes of coal for revival.

CIL, however, plans to invest Rs4,000 crore in the mines although these are to be awarded on a turn-key basis, Bhattacharyya said.

CIL has shortlisted nine companies out of the total 17 that have responded to its EoI and is likely to float a tender for awarding the project next month.

Companies such as Reliance Infrastructure, Indo Australian Mining and Bucyrus of Germany are vying for the underground mines project while 12 corporate giants, including ArcelorMittal, Reliance, Sterlite, Essar and JSW Steel, are eying the abandoned mines.

Central Mine Planning and Design Institute is currently evaluating technical bids.

Coal India is expected to produce 520.5 million tonnes of coal in the terminal year of eleventh 5-year plan, ie, 2011-12, up from a level of 360.9 million tonnes achieved in 2006-07.

The growth of 160 million tonnes  (44.2 per cent) over the five year period translates into an annualised growth of 7.6 per cent as against 5.4 per cent achieved during the previous plan period.

CIL achieved a production level of 379.49 million tonnes in 2007-08 which is higher by 18.5 million tonnes  (growth of 5.1 per cent) over the previous year. ''The first half of the year witnessed major constraints by way of law and order problem in CCL and MCL, unprecedented rainfall, significantly higher than previous year and non-availability of forestry clearance and physical possession of land, particularly in Jharkhand. These two factors constrained the growth in the first half of 2007-08 at only 0.82 million tonnes (0.7 per cent). However, the coal companies geared up in the second half  and achieved a growth of 17.76 million tonnes (8.7 per cent), which is better than the asking growth rate for the XI Plan period,'' CIL said in a release.

CIL said s major performance highlight in 2007-08 has been the arresting of the trend of persistent decline in underground coal production continuing for decades.

The improvement in the underground coal production is the combined impact of a number of actions taken to increase coal production from the existing mines through introduction of new technology in some cases.

CIL has achieved not only the highest ever coal off-take of 375.32 million tonnes, but also the highest ever coal off-take growth over the previous year by 24.18 million tonnes, it said. 

However, despite strong growth, 22 power stations continue to remain critical as stocks at power house end have actually reduced from 14 million tonnes to 10.5 million tonnes, i.e., by about 3.5 million tonnes. 

CIL and its subsidieries have posted an aggregate profit of 9,576.22 crore in 2007-08 against a profit of Rs8,522.22 crore reported in 06-07.