KOLKATA (miningweekly.com) – In a shift from the ‘do-it-yourself’ method, southern India-based Singareni Collieries Company Limited (SCCL) will appoint mine developers and operators (MDOs) for coal projects outside its present operational hinterland.

The 127-year-old company, which operates 47 mines – 16 opencast and 31 underground, produces about 60-million tons a year of coal, predominantly from coal blocks in the southern Indian province of Telengana.

SCCL planned to expand production to 85-million tons a year by 2020 by opening ten new mines, most of them outside southern India. The Coal Ministry had, however, directed SCCL to further increase its production to 100-million tons a year by 2020, in line with government’s plan to increase India’s domestic coal production to one-billion tons a year by 2020.

To gain a toehold in coal mining outside its traditional operational geography of Telengana, the Telengana provincial government, which holds a 51% equity stake in SCCL, had formally requested the Coal Ministry to allow it to seek coal assets in the provinces of Chhattisgarh, Madhya Pradesh and Maharashtra.

Any expansion would require SCCL to appoint MDOs to ensure the projects are bought into production in the shortest time possible, a company official said.

He added that at least 14 domestic and international MDOs had shown an interest in implementing projects on behalf of SCCL across the country.

The first appointment of an MDO would be for the Naini coal block in the eastern Indian province of Odisha, which had an estimated reserve of 450-million tons. The operator would have 36 months to complete development of the block.

Officials pointed out that the development of new blocks through MDOs was also necessary as SCCL aimed to implement new technologies in all future projects. All new mines would adopt continuous miners and longwall technology, wherever possible.

SCCL was among the very few miners in India to have successfully implemented longwall technology. Few miners in India had the experience to implement such technologies, which also required a large capital outlay.

Officials cited the $157-million investment in the Adriyala Longwall mine to produce 2.2-million tons a year of coal in Telengana province. Although this was one of the largest investments in a mining project, the mine also has one of the highest production capacities of all underground mines in the country.

Further, SCCL had also asked the Coal Ministry to allow it to raise $150-million to build new mines, compared with the currently allowed $75-million.