BCCL and SAIL form SP
05 Apr 2007
Bharat Coking Coal Ltd (BCCL), a subsidiary of Coal India Ltd has decided to set up a special purpose vehicle (SPV) with Steel Authority of India Ltd (SAIL) to undertake a two million tonne per annum underground coking coal mine project. The total investment in the venture is expected to cost Rs500 crore. SAIL will invest Rs300 crore while BCCL would pump in Rs200 crore in the venture.
A K Paul, BCCL's chairman and managing director said BCCL had initiated a dialogue with SAIL which had shown interest in floating the SPV to develop the underground mine. He said "We have already identified a patch at Moonidih XV seam near Dhanbad in Jharkhand".
The proposal would be placed before the BCCL board and a detailed project report is being prepared for the mine, which has proven reserves of 50 million tonnes. Global companies would be invited to develop the mine. A foreign company has been approached by BCCL for developing the Moonidih longwall mechanisation project.
Paul said that SAIL would lift the entire production from the new mine at Moonidih. He said, SAIL was already taking coking coal from BCCL at a premium and it had assured of lifting the entire quantity of coal from the new venture. He added BCCL would be guarantor for the production and SAIL would chip in with money into the JV project.
"Talks are on with a Ukraine-based company, DEP Roski Engineering Plant. They are coming next week to continue this deal with BCCL," Paul said.
At present BCCL produces 24 MT of coal and plans to invest Rs1,350 crore to produce an additional 6 million tonne of coal in the 11th plan period. Paul said that of the Rs1,350 crore, Rs477 crore would be spent for underground mines, Rs748 crore for open cast mines to enhance production and Rs125 crore for modernisation of coal washeries.
On financial performance, Paul said that BCCL had posted a profit of Rs21 crore during 2006-07. The company had earned its maiden profit of over Rs202 crore in 2005-06 and recorded gross sales of Rs3,196 crore against Rs3,467 crore in the previous year.
Paul said the dip in profit was largely due to lower production of high grade coking coal, as it was difficult to mine in some areas due to habitation and railway tracks.
He said "We hope to earn a profit of Rs526 crore this fiscal," as BCCL had taken steps to increase production by one million tonne during the current fiscal from 24 million tonne in the last year, which would help the company make an additional Rs300 crore profit.
BCCL planned to develop two new mines at Kankee and Kujama with a capacity of 4 and 5 million tonne respectively. Paul also said BCCL would close down 41 mines in a phased manner in three year's time, since reserves had depleted in some of them while some others had become unsafe.
BCCL operates 70 mines of which 68 are in Jharia Coalfield and two under the Ranigunj Coalfield. It has 36 under ground, 12 open cast and 22 mixed mines. Besides these, it operates several coking and non-coking coal washeries and various other units.
He added that the 56,000 workforce currently employed in these mines would not be retrenched, but deployed in other mines.
