KOLKATA (miningweekly.com) – Moving against a general trend among Indian miners of closing down underground mines, State-run Singareni Collieries Company Limited (SCCL) has started work on developing a new underground mine in the southern state of Telangana.

SCCL will develop the Kalyani Khani-6 Incline block in Telangana with estimated extractable reserves of 15.65-million tons through a new underground mining project carved out of the Mandarmarri block.

SCCL is taking up the underground project to augment coal production and achieve a target of 70-million tons during 2019/20, compared with 64.4-million tons during 2018/19.

“SCCL invites expression of interest for carrying out pre-mining activities, development and extraction of coal seams by introducing three continuous miner technology equipment in a phased manner by outsourcing the Kalayani Khani-6 incline,” a notice issued by the company said.

Telangana state, which was carved out of Andhra Pradesh in southern India, has drawn up plans to construct thermal power plants with aggregate generating capacity of 6 000 MW and the onus would be on SCCL to meet the incremental thermal coal demand from these new projects, company officials said.

SCCL has on its own drawn up plans to set up thermal power plants including 1 800 MW, while under the terms of formation of the new state, government run power utility NTPC was expected to implement thermal power capacity of 4 000 MW to meet electricity demand in Telangana.

The new thermal power plants were expected to generate additional demand of about 40-million tons a year of thermal coal, company officials said.

SCCL’s greenfield underground mining project is significant against the backdrop of a government advisory to Coal India Limited (CIL) to adopt a “cost-plus” approach for each coal mine under its fold, which would entail that CIL either covert underground mines to opencast wherever feasible, or close down existing operating underground mines, which were not profitable on a standalone basis.

For example, in the case of Eastern Coalfields Limited (ECL), the operational wholly owned subsidiary of CIL with highest coal production from underground mines, 20.5-million tons a year of its total 50.16-million tons a year total production came from its only two operational underground mines. ECL had closed down 11 underground mines over the past two years and it was possible that in view of the new cost-plus norm advised by the government the miner would have to close down its two last operating underground mines too.