Coal India losing interest in underground mining

KOLKATA (miningweekly.com) – Underground mining is increasingly falling off the map of major producer Coal India Limited (CIL), despite the company planning to add an estimated 182-million tons a year to its production profile by 2020.

Higher capital costs, the geological parameters of new reserves and the group’s inability to stop production from underground mines falling have compelled the miner to plan future incremental production entirely from opencut mines.

Production from CIL’s underground mines had been steadily declining from 9% of its total output in 2012 to below 6% in 2016.

According CIL officials, there has been natural depletion of reserves at existing operational underground mines. The absence of contiguous new deposits is said to be a major hurdle to developing new underground mines, as fragmented blocks made the installation of long-wall mining technology unviable in such deposits.

Currently, opencast mines comprise 93% of CIL’s total production, although only 42% of the company’s 413 operational mines are opencut operations.

However, CIL officials were quick to point out that there was no “official strategic policy” to bury underground mining, despite underground mining losing its prominence in future CIL production plans.

In fact, late last year a business delegation from Poland held preliminary talks with CIL wherein it offered to provide the latest state-of-the art underground mining technology to India for development of reserves below 300 m.

CIL officials said that despite not being in favour of underground mining in the coming years, the method could not be abandoned given the imperatives of country’s coal reserve parameters.

It was pointed out that if production of low ash grade coal suitable for new-generation thermal power plants were to be stepped up, it could be only through underground mining, as 25% of such grades of coal occurred below 300 m and could not be extracted through opencast mining.

However, officials have conceded that several policy thrusts over the past few years to revive underground mining have yielded little positive results.

For example, 18 months ago, the CIL’s technical consultancy arm, the Central Mine Planning Development Institute (CMPID), had suggested merging underground mines to achieve more contiguous coal panels. This never materialised, owing to issues with land acquisition and conflicts between various operational subsidiaries of CIL.

The Coal Ministry had also suggested a dual pricing regime for coal, in which coal produced from underground mines would be higher priced to ensure better marginal realisations and higher investment in such mines, but the proposed scheme remains on paper only.