IRL to enter into contract mining of coal in India

KOLKATA: India Resources Ltd (IRL), a mining firm listed on the Australian Stock Exchange, has decided to enter into contract mining of coal in India. The Australian firm has just inked a letter of intent with Bankura Coal Co to mine coal in Raniganj, West Bengal at a total investment of over Rs 100 crore. This is also perhaps the first instance of contract mining by a foreign company in the coal sector which is dominated by public sector major, Coal India Ltd.

Towards this, Perth-based India Resources Ltd and Bankura Coal Co Ltd of West Bengal have formed an SPV to operate the underground coal mine in West Bengal for captive use. Incidentally, India Resources has made a foray into India’s mining sector by taking up contract mining of copper for Hindustan Copper Ltd (HCL). As part of it, IRL has been producing 300 tonnes of copper concentrates at HCL’s Surda mines in Jharkhand.

Bankura Coal has six sponge iron companies under its wing and has been allotted a lucrative coal block in the heart of the state’s Raniganj coal belt. The mine has total reserves of 95 million tones. India Resources will start operations at the new mine within three years. "The output from this mine is expected to peak in the seventh year of operations when it is estimated to produce half a million tonnes of coal," Mr. Arvind Misra, Managing Director of India Resources Limited said.

This is part of IRL’s strategic move to get into exploration side of the mining business in India. "Apart from contract mining, we would like to grow the exploration business," Misra added. In step, IRL has also applied for some 15 prospecting licenses for iron ore in Orissa and Jharkhand. "We have also applied for license to explore for lead and zinc in the Aravali project in Rajasthan," Mr Misra said.