CIL to buy equipment worth $2 bn in 5 years

KOLKATA, 17th October, 2009: Coal India (CIL) will procure spares and equipment worth $2 billion from the overseas market in the next five years. This will mainly be procured to beef up production levels by 175 million tonne, and take up at least 134 greenfield mining projects.

Confirming the development, CIL chairman Partha S Bhattacharyya said: “We intend to increase production capacity by as much as 35 mt every year over the next five years. This will require sourcing equipment from overseas — equipment that is not manufactured in India. The cumulative value is expected to be about $2 billion over the next five years.”

Going by the target, CIL is slated to touch a total production level of 570 mt by the end of the next five years. “To achieve this, we have to source high capacity open cast mining equipment, including high capacity dumpers, shovels and dredgers for mines. All these are not manufactured in the domestic market. A part of the procurement will also go into replacing existing old equipment,” said a senior CIL official.

Incidentally, CIL’s effort to take over the ailing Durgapur-based Mining and Allied Machineries Corporation (MAMC) is yet to fructify. The proposal was taken up to start manufacturing underground mining equipment at the plant since there are no established makers as on date. Once, MAMC’s debts are waived by the Centre, CIL and its partners, including Damodar Valley Corporation (DVC), will be able to manufacture open cast mining equipment, too.

“It will help substitute imported equipment for both open cast as well as underground mines. However, we are still waiting for the government’s clearance,” said NC Jha, director technical at CIL. “Since MAMC is a BIFR case, the joint takeover proposal by BEML, CIL and DVC to take over the firm will now have to be passed by the high court, following which needs to be cleared by the Cabinet. BEML intends to take 48% in the company, while CIL and DVC will take 26% each,” said a CIL official. Incidentally, MAMC owed the West Bengal government about Rs 100 crore, which has already been waived. Central dues stand at about Rs 1,200 crore, and will require a Cabinet clearance.

CIL, DVC and BEML to invest INR 1000 crore for MAMC revival

Kolkata, 12 November, 2008: BS reported that CIL, DVC and BEML will be investing around INR 1000 crore in phases to revive the West Bengal based Mining and Allied Machineries Corporation, a BIFR company since 2003.While BEML will be the major share holder with 48%, CIL and DVC will be picking up by 26% stake each in the company.

A revived MAMC is expected to commence operation from the middle of 2010.Mr PS Bhattacharya chairman of CIL said that "I have approached the Mr HC Gupta coal secretary to take up the matter with the ministry for a cabinet clearance on the takeover. Prior to that the clearance for the joint take over will have to come from the Calcutta High Court as it is a BIFR company and the court is sole custodian to determine the company’s future."

Mr Bhattacharya said that MAMC has dues of INR 1200 crore with the Centre and about INR 100 crore with the West Bengal government. He said that “I approached the West Bengal government for a waiver and they have readily agreed. The green signal for the central waiver is still awaited and for this cabinet clearance is mandatory."He said that a silver lining recently emerged on the future revival of the company with the State Bank of India deciding to prune the debt component of the company from INR 430 crore to INR 120 crore.

He added that SBI ends have been tied up and things are moving in the right direction.Revival of MAMC is essential for CIL as it is moving ahead in augmenting underground mining production in the next couple of years. The coal giant is also seeking overseas tie ups in Australia, China, Indonesia and USA for developing UG mining in the country.