A consortium of Power Mech Projects and PC Patel Infra Private has secured a mine development and operation (MOO) project from Steel Authority of India (SAIL) for the Tasra open cast project in Jharia Coal Fields, Jharkhand, India.
The contract has an estimated value of Rs304.38bn ($3.69bn) and comes with a period of 28 years, including two years for development.
Power Mech leads the consortium with a 74% stake while PCPatel Infra owns the remaining 26% stake.
Under the MOO contract, the consortium is responsible for mining activities including mine infrastructure development, coking coal extraction, crushing, transportation and setting up a coal washery with capacity of 3.5 million tonnes per annum (mtpa).
The consortium will also supply steel-grade coking coal to SAIL as well as undertake rehabilitation and resettlement activities.
Power Mech Projects said that a special purpose vehicle will be formed to carry out the project.
With total coal extraction reserves of 96.78 million tonnes, the project will have an annual capacity of 4mpta. The concession period of the mine is 28 years, including a two-year development period.
Power Mech Projects chairman and managing director Sajja Kishore Babu said: “This project will further strengthen our robust order book and enable the company to diversify its order book, which is in line with its strategy to have an optimum mix between power and non-power segments.
“This mine has all statutory approvals in place and it is a ready-to-mine project. The revenue booking can be started from FY24 onwards.”
This marks the second MOO contract for PMPL after the KBP MOO project in 2021.
Babu said that the Tasra project is expected to meet the surging demand of coking coal in the country, which is mostly dependent on import for meeting its coking coal requirement.
Babu added: “KBP and Tasra MOOs together will generate 9mtpa when the peak capacities of the respective mines are achieved and the coking coal extracted through these mines will definitely be an inexpensive alternative to the coking coal, which the country is currently importing, and will save forex outflow.”
