Govt boosts private sector participation in coal mining

In a major boost to private sector participation in coal mining, the government handed over 18 out of 28 projects to private companies, termed Mining Developers cum Operators (MDOs).

Initially, Coal India Limited (CIL) identified 15 coal mine projects with a combined capacity of about 168 MT for MDO implementation. This number has now expanded to 28 projects (18 opencast and 10 underground mines) with a total capacity of about 257 MT, an official press release has said.

“As of today, 18 mines have been awarded to leading private parties, marking a significant milestone in this ambitious endeavor. The engagement of these MDOs promises to make substantial contributions to coal production, ensuring both enhanced output and operational excellence,” it said.

The primary goal of engaging MDOs is to significantly increase coal production by streamlining operations, enhancing productivity, and reducing mining costs. These MDOs are tasked with excavating, extracting, and delivering coal to CIL according to approved mining plans, thereby boosting domestic coal output. By partnering with MDOs known for their advanced technological capabilities, CIL aims to modernize mining practices and improve operational efficiency.

These reputed operators, selected through open global tenders, will oversee the entire mining process, from excavation and extraction to the delivery of coal, in line with the agreement. Their involvement is anticipated to inject advanced technology and unparalleled operational efficiency into the system, driving remarkable improvements in production capabilities, the release said.

In addition to boosting production, the MDOs will manage crucial aspects such as rehabilitation and resettlement (R&R) issues, land acquisitions, and environmental clearances. They will also coordinate with the state and Central Pollution Control Boards to guarantee rigorous adherence to environmental standards. Each contract with the MDOs will span 25 years or the life of the mine, whichever is shorter, ensuring long-term stability and consistent advancements in mining operations.

The Ministry of Coal’s strategy to engage MDOs represents a significant step towards modernizing India's coal mining sector, the release said.