3 Indian companies in race for CIL Mozambique Exploration Project

Friday, 02 Dec 2011

Three Indian companies are in the race for a Coal India contract that called bids for exploration of its 200 odd square km block in Mozambique.

The world largest coal miner, which opened the price bids of Mining Associates, Indu-CBS Joint Venture and Kartikeyan Pvt Ltd last week, won the block two years ago. It is now expected to award the contract within 45 days.

Mr AK Singh CMD at the Central Mine Planning and Design Institute which is CIL's technical arm that finalizes and floats tenders said that "We have asked the parties concerned to justify the price bids following which we will scrutinize them and finalize the lowest bidder.”

Coal India Africana Limitad, a wholly owned subsidiary of CIL, won a 5 year licence for exploration and development of two coal blocks in Mozambique in August 2009.

In February, it invited exploration bids for A1 and A2 mining blocks in the northwestern province of Tete. During May, three parties submitted their financial bids. The final selection was to be completed by July. However, there were some issues with respect to the currency in which the bank guarantees were submitted by the bidders. This forced CIL to scrap the bids and call for fresh ones.

Nevertheless, Coal India hopes to start the first phase of production by 2013-14. With an initial estimated reserve of 1 billion tonnes, the coal will be imported to cater to domestic demand from customers in Western India. It is an exploratory block with an area of about 205 square km and preliminary estimates suggest that it could have a reserve of about 1 billion tonnes.

About 20% of the deposits are expected to be coking coal while the remaining is expected to be thermal coal that can be used as fuel in power plants. Exploration will be done in two phases. The first phase will include finding out the tentative concentration of reserves at various locations in the block. The second phase will include estimation of the exact quantum of coal in these probable areas with high reserves.

(Sourced from ET)