1. 3rd Annual Coal Market in India – 2013 conference
Hotel ITC Sheraton, Saket, New Delhi
28th August 2013
Panel Discussion on MDO – PPP to augment Coal Production
Sri D C Garg
Chairman cum MD
Western Coalfields Limited

2. Brief Profile Dinesh Chandra Garg
Well known for administrative acumen and astute leadership in Mining Industry
Experience of over 3 Decades in Coal Industry
Chairman cum MD , WCL since May 2007
Under his stewardship, Western Coalfields Limited has galvanized as a company which has maintained appreciable growth in coal production, excelled in corporate governance, earned consistent profit and at the same time maintained sustainability of environment- physical as well as social. 2

3. STRATEGIC IMPORTANCE OF COAL IN INDIA
Around 81 % of coal consumed was met through indigenous source
During FY , CIL produced million tonnes which is % of India’s current coal production ( million tonnes) and met % of coal demand ( MT) equivalent to 37 % of India’s commercial energy needs
* Others 9.35 %
e-Auction %
SCCL 9.53 %
** Non Power %
CIL 81.12%
Power (U) %
Coal Production : Company -wise Share
Sector-wise Supply Share from CIL Sources
* Others include captive producer ,TATA STEEL, Meghalaya & Other PSUs
** Non Power include Steel, cement, sponge iron, fertilizer. Bricks etc

4. Projections of Major Coal Consumer Sectors - Power
Coal will remain most preferred fuel for Indian Power Sector
Capacity Addition during Xth Plan was GW, that during XIth plan was GW. It has been envisaged to add 96 GW during XIIth plan.

5. Projections of Major Coal Consumer Sectors – Steel- Cement

6. COAL DEMAND SUPPLY SCENARIO
COAL DEMAND MATRIX
COAL SUPPLY MATRIX
(Optimistic scenario)
COAL INDIA LIMITED    
  (Target)
Manual
0.38
0.31
0.30
Mechanised
397.07
413.46
442.78
TOTAL OPENCAST
397.44
413.77
443.08
Conventional B&P
3.52
2.08
Conventional LW
0.02
0.00
Mechanised B&P(SDL/LHD)
32.31
32.46
33.45
Mechanised LW
0.26
0.06
0.15
Continuous Miner
1.70
2.22
2.38
Special Methods
0.59
0.68
0.87
TOTAL UNDERGROUND
38.40
37.49
38.92
CIL - TOTAL
435.84
451.25
482.00
SCCL : 57 MT
115 Captive Blocks : 100 MT
Others (Six PSE companies -JKML, JSMDCL, DVC, IISCO), Tata Steel and Meghalaya) : 23 MT

7. COAL IMPORTS
India is likely to become the second largest importer of coal
next to Japan.
Power Sector is the biggest importer of Thermal Coal
With Coal demand rising by over 10% annually India’s coal imports have risen at a compounded growth rate of 23% over past five years.
India imported 135 million tonnes of Coal in valued at $15.5 billion
185.0
Million Tonnes
98.93
43.08
20.6
With Coal demand rising by over 10% annually and domestic supplies rising just 3-4%, India’s coal imports have risen at a compounded growth rate of 23% over past five years. In terms of Rupees the increase in coal imports have been about 15% (CAGR) during these years.
The coal import bill soared a whopping 75% between to Rising coal imports could potentially have a pronounced impact on CAD in short to medium term.
It is, therefore, necessary to attract private participation in coal mining with the objective of bridging this large gap. The present proposal is, therefore, aimed at bringing new mines into production through private participation (MDO) in coal mining.

8. Scaling up coal production at an accelerated pace;
Benefits of Mine Developer Operator (MDO)
Scaling up coal production at an accelerated pace;
Harnessing additional capital and efficiencies in the context of a long-term agreement
Risk of project completion and delivery of agreed outputs will be borne by the separate entity.
Will help optimize life-cycle costs and thus reduce mining costs;

9. MDO - The Concept
As envisaged by Coal India Limited
MDO - essentially an arrangement where the “MDO” would participate in producing coal on behalf of CIL, while CIL would continue to remain owner of the mine as well as the coal.
This arrangement would be characterized by a Contract Agreement between CIL and the MDO with the latter undertaking to develop and operate the coal mines for delivering an agreed annual output of coal on payment of mining charges by CIL.
The contract period shall be the mine life as per the Project report or 25 years, whichever is less. This life however may vary on the basis of actual production vis-a-vis actual reserves.

10. MDO: SCOPE OF WORK
The selected “Mine Developer & Operator (MDO)” to develop & operate the mine in accordance to the approved PR.
Land will be acquired by owner and physical possession and rehabilitation of the PAPs to be done by MDO.
Land acquisition will be the joint and several responsibility of the Company and MDO.
Employment against Land to be given by Coal Companies and gainfully utilized somewhere.
The MDO shall finance, procure, construct, operate & maintain the mine to achieve coal production and OB removal targets for a specified duration as per calendar plan including land reclamation concurrently as per EMP and Mine Closure Plan.

11. MDO: SCOPE OF WORK
The MDO shall construct & commission the CHP & Railway Sidings as per the specifications provided. Funding for construction, operation & maintenance of CHP and Railway Siding shall also be responsibility of the MDO.
All activities within mine premises & up to agreed discharge coal point to sustain production as per calendar plan shall be the responsibilities of successful bidder/MDO. Coal will be transported by the MDO from the faces to receiving pit/ bunker of CHP installed on the surface.
The requisition for the railway rakes and its loading will be the responsibility of the MDO. In case of coal dumping in the stockyard, the re-handling, will also be done by MDO, who shall be paid as per the dispatched quantity of coal.

12. MDO: SCOPE OF WORK
The MDO shall construct & Commission the Washery as per the specifications provided.
MDO shall plan & design, after due diligence study of likely quality of coal to be treated in the washery (including washability investigation test of the proposed raw coal composite feed).
The MDO shall select State-of-the-Art equipment to construct, commission , operate & maintain the washery including requisite infrastructure for Guaranteed Washed Coal Production in terms of quality & quantity by for entire life of mine keeping in view the likely quality variation of coal produced from mine
The MDO shall comply in all respects the various provisions as prevalent in India & environmental regulations & safeguards as per norms etc. laid down by SPCB/CPCB.

13. Obligation of CIL/Subsidiary company
CIL will specify the Indicative capital cost of the Project in the RFP Documents of the Project which excludes the cost of land and R&R cost. The assessment of actual costs, however, will have to be made by the Bidders.
Geological structures of the mine including strike, dip, faults, seam description, details of dirt-band, seam quality, geological reserve etc.
Description of mine including, mode and no. of entries to the underground mines, method of work, type and no. of machinery to be deployed, pumping and ventilation system, transport of coal, men and material, power distribution system, stowing arrangement if required etc;
Coal handling arrangements including storage, loading and despatch;
Civil construction including buildings, roads and culverts, etc.; and
Broad specifications of major equipment
CIL would prepare a Project Report which shall be provided to the prospective bidders.

14. Two Stage Bidding Process
Qualification Stage
Bidding Stage
The first stage (the "Qualification Stage") of the process involves qualification of interested parties/ consortia who make an Application in accordance with the provisions of this RFQ (the "Applicant", which expression shall, unless repugnant to the context, include the Members of the Consortium).
At the end of this stage, the Company shall announce a list of pre-qualified Applicants who shall be eligible for participation in the second stage of the Bidding Process (the "Bid Stage"), i.e. Request for Proposals (the “Request for Proposals” or “RFP”) as invitation by the Company for Proposal for the Project.

15. Payment Mechanism to MDO
Mining charges for the quantity of coal fed into the receiving hopper/loaded into the wagon as the case may be, as per applicable rate of coal mining charges per tonne.
Mine Development charges i.e. shaft sinking with furnishing, incline/drift drivage with supports as per the rates provided in RFP
Re-handling charge per tonne of coal (as provided in RFP) in case of non-availability of wagons, wherever applicable

16. Status of progress of MDO in CIL

17. Summary of projects/mines offered
through MDO route
First Phase – 7 Projects/Mines
OC – 5 Nos. (Total Cap – Mty)
UG – 2 Nos. (Total Cap 2.52 Mty)
Other Prospective Projects/Mines
OC –7 Nos. (Total Cap – 113 Mty)
Additional Projects/Mines
UG – 6 Nos. (Total Cap 6.42 Mty)

18. Bidding Status
Itapara OC, ECL: RFQ document uploaded on ECL website on
Last date of submission: Date of opening:
Malachua OC, SECL: RFQ document has been uploaded on on relevant websites and published in newspapers.
Last date of submission: Date of opening:

19. Status of 7 Projects being offered through MDO in First Phase

20. MDO – Salient Details of 7 Mines Identified (1st Phase)
OC PROJECTS
Sl. No
Block/ mine
Cap (MTY)
Exploration /PR Status
Reserve (MT)
SR (M3/T)
Grade
Eastern Coalfields Ltd. 1
Itapara OC, Dist. Bardhaman, WB 3
PR prepared (03/2011)
80.38 (M)
6.92 F
Central Coalfields Ltd. 2
Ara OC, Dist. Ramgarh, Jharkhand
PR under preparation
38.00 (M)
4.86
W-II, III
DRD OC Project, Dist. Bokaro, Jharkhand 4
PR approved in principle
69.26 (M)
2.53
W II
Sub-total 6
Northern Coalfields Ltd.
Jhingurdah Bottom OC, Dist. Singrauli, MP
PR available
15.10 (M)
6.18
F-G
(M ) - Mineable Reserve, (G) – Geological Reserve 20

21. Exploration /PR Status PR approved in principle
Sl. No
Block/ mine
Cap (MTY)
Exploration /PR Status
Reserve (MT)
SR (M3/T)
Grade
South Eastern Coalfields Ltd. 5
Malachua OC, Johilla Area, Dist. Shahdol, MP 3
PR approved in principle
57.54 (M)
13.78
D-G
UG PROJECTS
Mahanadi Coalfields Ltd. 6
Talcher(W) UG, Dist. Angul, Talcher CF
0.52
PR approved
17.93 (M) -
A-C
Western Coalfields Ltd. 7
Murpar Expansion UG, Umrer Area, Dist. Chandrapur, MH
2.00
PR available
(G)
B-F
Grand Total
16.52 21

22. Exploration / PR Status Central Coalfields Ltd.
MDO – Salient Details of other prospective OC Mines/projects
Sl no
Block/ mine
Cap (MTY)
Exploration / PR Status
Reserve (MT)
SR (M3/T)
Grade
Central Coalfields Ltd. 1
Magadh OC, Dist. Chatra & Latehar, J’khand 20
PR approved
351 (M)
1.51 F 2
Amrapali OC, Dist. Chatra, J’khand 12
291.1
(M)
1.58
 Sub-total 32

23. South Eastern Coalfields Ltd. 3 Pelma OC, Dist. Raigarh, CG 15
Continued…
Sl no
Block/ mine
Cap (MTY)
Exploration /
PR Status
Reserve (MT)
SR (M3/T)
Grade
South Eastern Coalfields Ltd. 3
Pelma OC, Dist. Raigarh, CG 15
10 mty PR approved, 15 Mty PR under preparation
(M)
3.52 F 4
Durgapur OC,
Dist. Raigarh, CG 6
PR approved in principle
140.5 (M)
6.04 E 5
Madan Nagar OC,
Dist Surajpur, CG. Bhatgaon Area. 10
Draft PR under preparation at CMPDIL
240.22
(G) NA
Sub-total 31

24. Mahanadi Coalfields Ltd. 6 Siarmal OC Dist. Sundargarh (Odisha) 40
Continued…
Sl no
Block/ mine
Cap (MTY)
Exploration /
PR Status
Reserve (MT)
SR (M3/T)
Grade
Mahanadi Coalfields Ltd. 6
Siarmal OC
Dist. Sundargarh (Odisha) 40
Draft PR submitted by CMPDIL
(M)
1.47
C-G (mostly F) 7
Garjanbahal OC, 10
PR prepared, advance action approved
(M)
0.98
D-G (mostly F)
Sub-total 50
Grand Total
113

25. Western Coalfields Ltd
Salient Details of 6 additional UG Mines/projects
Sl no
Block/ mine
Cap (MTY)
Exploration /
PR Status
Reserve (MT)
Grade
Western Coalfields Ltd 1
Borda UG
2.00
GR available
(G)
D-E 2
Jamunia
0.72
PR approved In-principle
22.76 (M) C 3
Dhankasa UG
1.00
17.71
(M) D
Sub-total
3.72

26. Central Coalfields Ltd.
Continued…
Sl no
Block/ mine
Cap (MTY)
Exploration /
PR Status
Reserve (MT)
Grade
Central Coalfields Ltd. 4
Piparwar Mangardaha UG
1.38
PR approval under process
25.27 (M)
B-C 5
Churi Benti UG (Cont. Miner Panels Only)
0.81
PR approved
5.13
(M) B 6
Parej East UG
0.51
17.61 (M)
W- I
to IV
Sub-total
2.70
Grand Total
6.42

27. WCL Projects offered for MDO

28. WCL – MURPAR EXPN. UG LAND
525 Ha notified u/s 4(i) of CBA. Application under section 7(i) to be submitted after approval of PR.
R&R
Involved FC
Forest land involved. FC application to be submitted. EC
Required, WCL proposes that EMP to be prepared by MDO
Eva-cuation
Railway siding proposed near Murpar UG mine. Till then coal is to be transported by road to Umrer Railway siding, 72 Km away from the project. It is further proposed to extend the railway line upto Murpar Expansion project, matter being taken up with RITES.
Bidding Status
Part I opened on , two bidders participated.

29. WCL – Borda UG
LAND
3341 Ha notified u/s 4(i) of CBA on Proposal u/s 7(i) to be submitted after approval of PR.
R&R
Involved FC
Forest land involved. FC application to be submitted. EC
Required, WCL proposes that EMP to be prepared by MDO
Eva-cuation
For evacuation extension of track taken with RITES.
Bidding Status
Part I opened on
Three bidders participated.

30. Tenancy 407 Ha, Forest 74.70 Ha, Govt 9.06 Ha.
WCL – Jamuniya UG
LAND
Tenancy 407 Ha, Forest Ha, Govt 9.06 Ha.
Ha land vested u/s 11(i) on
R&R
Involved FC
FC application submitted on Under process. EC
Required, WCL proposes that EMP to be prepared by MDO
Eva-cuation
Available
Bidding Status
Draft RFQ document for UG mines prepared by CMPDIL and circulated to subsidiary companies for their comments.

31. FC application submitted on 20.11.09. Under process.
WCL – Dhankasa UG
LAND
Total Ha (Tenancy ha, Forest ha, Govt ha. Proposal for notification u/s 11(i) submitted to MOC on
R&R
Involved FC
FC application submitted on Under process. EC
Required, WCL proposes that EMP to be prepared by MDO
Eva-cuation
Available
Bidding Status
Draft RFQ document for UG mines prepared by CMPDIL and circulated to subsidiary companies for their comments.

32. Thank You