KOLKATA (miningweekly.com) - India’s Coal Ministry has galvanized producer Coal India Limited (CIL) to rope in private mining companies to revive defunct coal mines, and to complete the process by March 2014.
According to the Ministry, this would mark a significant step in permitting private domestic and foreign coal mines - in a sector reserved for government miners - through private-public-partnership (PPP) based on common model concession (MCA) agreements.
As per directive from the Ministry, CIL would have to invite private miners and get the defunct mines operational within definite timelines.
The MCA agreement, approved by a group of Ministries, would have to be adopted by the CIL board by November 30, while the request for qualification had to be done by December 15, requests for proposals floated by February 2014 and contracts awarded by March 31, 2014, with the stipulation that successful private miners bring defunct mines into production within five to eight months from the date of award of contract.
The Coal Ministry, along with CIL, had made several failed attempts since 2008 to revive about 20 identified defunct coal mines with an estimated reserve of two-billion tonnes of coal.
At one point, leading global miners like Rio Tinto, Joy Mining and ArcelorMittal, along with domestic players like Essar Mining, submitted proposals in response to CIL notices to revive defunct mines, but not a single proposal was accepted.
One of the major impediments to roping-in private miners was the absence of a common mine development and operator agreement acceptable to private miners, while simultaneously adhering to the legal framework governing coal mining in the country, a government official said.
Implementation of a PPP model in the coal sector was also facing legal uncertainties, as according to the Indian Coal Nationalisation Act, coal mining was the exclusive domain of government miners and private miners, and the government was not sure about the legal locus standi of private miners in PPP projects.
However, the official said that the PPP framework, including the MCA, had been framed at the highest level, the Prime Minister’s Office, and had subsequently received approved from an inter-Ministerial group comprising representatives of the Coal, Finance, Law and Mines Ministries.