Amrapali, CIL’s first big new mine in 5 years, goes into production

Piyush Goyal, minister of state (independent charge) for power, coal and new and renewable energy, on Friday dedicated the Amrapali opencast coal mine of Central Coalfields Limited (CCL) – the first major project to be commissioned by a Coal India Ltd (CIL) unit – to the nation.

The 12-million-tonnes-per-year mine would help boost supplies to fuel-starved power plants across the country and curtail imports of the fuel.

CIL, the world's biggest coal miner has been struggling to raise output fast enough to meet rising demand from power companies. CIL's failure to increase production in line with demand has made India the world's third-largest coal importer despite having the world's fifth-biggest reserves.

The Amrapali project took almost 10 years to start digging out coal from the open cast pit, mainly due to delays in land acquisition and lack of a railway network to connect the mine.

The project was fast-tracked on orders of the new coal and power minister Piyush Goyal, who took charge about 45 days ago, said Central Coalfields chairman Gopal Singh.

"The minister has given us strict orders to raise output," Singh said at the inauguration of the mine through video conferencing.

The Amrapali project has total mineable reserves of 291.1 million tonnes and observed reserves (OBR) of 459.68 million cu metres. The mine life is estimated at 30 years at a stripping ratio of 1.58. The mine will produce average grade 'G11' coal and give an internal rate of return of 45,96 at 100 per cent capacity utilisation.

The project requires total land area of 1426.08 hactres, including 793.08 hactres of forest land and 633 hactres of non-forest land. The project will necessitate rehabilitation of 6 villages.

An expansion programme for raising production rate to 30 million tonnes a year (peak capacity) is under preparation at the CMPDI. This includes mining of 150 million tonne coal reserves on the dip side of the Amrapali project.

The sanctioned capital expenditure was Rs858.11 crore (at January 12 price level), while the actual cost is estimated to have gone up to Rs1,100 crore (estimated at June 2014 price level).

Goyal said many more such projects were needed to help India provide power to all, a pet project of prime minister Narendra Modi, who in May won India's strongest election mandate in 30 years on promises of growth.

Coal production in the country stood at 566 million tonnes in the financial year ended 31 March 2014, against demand of 715-720 million tonnes, necessitating imports to meet fuel needs of majority of its thermal power plants.

The Amrapali mine is expected to produce 3 million tonnes this financial year, during which Central Coalfields will raise production by 10 per cent to 55 million tonnes.

The mine is likely to start producing at full capacity in two years when it is connected to a rail network, Singh said.