Eastern Coalfields lines up Rs 2,300 cr investment

KOLKATA: Coal India subsidiary Eastern Coalfields (ECL) has decided to invest Rs 2,300 crore to set up two greenfield projects and expand four underground mines to produce an extra 16 million tonnes in the next five years.

“The company will spend over Rs 2,300 crore for increasing production to 46 million tonnes by 2012 from the existing 30.5 mt. The entire investment is proposed to be met through internal generation,” Deepak Chakravarti, ECL chairman-cum-managing director, said.

“The two greenfield projects, one at Chupervita and another at Hura-C, both in Jharkhand, will have a capacity of 4 million tonnes and 3 million tonnes, respectively, while the capacity of Rajmahal will be expanded to 17 million tonnes from 10.5 million tonnes. The capacity of Chitra and Sonepur Bazari mines will also be enhanced,” he said.

Apart from these projects, ECL has plans to develop two mines at Tilabani and Madhujore in West Bengal with 5 million tonnes capacity each per year in collaboration with global players. “If achieved, these would be five times larger than any of the existing under ground mining capacities in India. Currently one million tonne is the highest,” he said.

“ECL will play an important role in achieving CIL’s target of coal production mainly from underground mines during the 11th plan,” Mr Chakravarti said.

“The company has invested Rs 280 crore in the past two years for augmenting capacity,” he added. Speaking on the company’s financial performance during 2006-07, the ECL chairman said the company is poised to make a modest profit of around Rs 100 crore on a turnover of around Rs 4,480 crore.

Citing reasons for lower profit projection, Mr Chakravarti said it was due to an increase in wage bill and increased provisions made after actuarial valuation of gratuity, rise in payment of exgratia. In 2007-08 the company is expecting a profit of Rs 350 crore. By comparison, ECL had posted a higher profit of Rs 363.86 crore in 2005-06 for the first time in its history.

Dwelling on the mines at Tilabani and Madhujore, that the company plans to develop through joint venture, he said talks were on with an Australian firm, but the entire process will be done through global tendering.

Both the projects have a proven reserve of 150 million tonnes each, he said. The company will float global tenders for the projects, which would take about two years to finalise.

He said the public investment board has approved the two greenfield projects at Chuperbhita and Hura-C. These two projects along with Rajmahal, which is undergoing capacity expansion, will cater to the coal requirement of 24 mt per year for NTPC’s Farakka and Kahalgaon plants from 2012.

Mr Chakravarti said ECL has entered into an agreement with a private party for introducing a continuous miner to increase underground production at Jhanjra by for 0.42 mt per year. The machinery is expected to arrive next month and production will begin from June this year, he added.

Global tender is being issued for the introduction of two more continuous miners at Sarpi and Jhanjra phase-II, while for the introduction of longwall mining at Jhanjra for 1.70 mt production per annum, global tender had been issued and it was now close to being finalised.