KOLKATA (miningweekly.com) - After several failed attempts over nearly a decade, India’s Coal Ministry is once again seeking to revive abandoned mines through technical and financial participation from overseas miners.

According to a Ministry official, the government had identified between 18 and 20 abandoned coal mines which still had estimated reserves of two-billion tons between them, and fell in geographies controlled by Coal India Limited (CIL) subsidiaries such as Eastern Coalfields, Bharat Coking Coal and Central Coalfields.

Citing the success of Hindustan Copper, which revived production from abandoned copper mines, the official said that there had been vast changes in the technology and investment priorities of global miners since previous failed attempts to restart these abandoned mines.

The Central Mine, Planning and Development Institute, a subsidiary of CIL, had been directed to prepare a new road map for these mines, based on the public-private partnership (PPP) concept and involving overseas and domestic mining companies.

Incidentally, the institute had also been mandated to draft a mine development and operations (MDO) model for PPP projects in the Indian coal sector.

Since 2008, CIL had made several attempts to revive these mines, abandoned following flooding, and had invited tenders from foreign the local miners to float joint ventures in developing the 18 abandoned mines.

Leading global mining conglomerates like Rio Tinto, Joy Mining, Arcelor Mittal and domestic companies like Essar Mineral Resources had shown interest in the proposal. However, CIL aborted the initiative, with the miner citing several reasons, including the unsuitability of the proposed technology given the geophysical nature of the mines.

Coal-bed Methane Extraction/Coal Mining Suggested

One of the plans currently being considered to make the revival of these abandoned mines more attractive to investors was to club them alongside blocks to be awarded for exploration, development and extraction of coal-bed methane (CBM), the official said.

Under such a new allocation policy, current and prospective CBM developers would have the option of extracting coal along with methane from fields in their allocated areas. Under old norms, the CBM developer was not permitted to extract coal until methane resources were exhausted on expiry of the 35-year lease.

CBM developers would be given permission to mine coal, on payment of a reserve price, only in abandoned mines in the area. In the case that the CBM developer was not interested in mining coal, the rights could be transferred to another miner. Moreover, the CBM developer would also have the option of extracting coal through an MDO contract with any other mining service provider if it did not have the expertise to extract coal.

According to the Coal Ministry official, the additional incentive of coal extraction from abandoned mines along with CBM would ensure an additional revenue stream for CBM developers and, at the same time, ensure the rapid attainment of incremental coal production.

Rough estimates from the Ministry indicated that if the expected 25 bcm of methane resources is fully exploited, additional production of 100-million tons a year of coking coal could be achieved from all the abandoned mines across the country.

However, the official acknowledged that while revival of all 240 abandoned mines across the country may not be feasible, between 30 or 35 of the abandoned mines with CBM potential could yield between 8-billion and 10-billion tons of coal reserves.