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Coal India has decided to outsource underground mine development and operations, company executives said.

A company spokesperson said Coal India subsidiary, Central Mine Planning & Design Institute (CMPDIL), will soon invite tenders for appointing such operators for two new underground mines that aim to produce at least 5 million tonnes a year each.

Coal India’s existing underground mines employ 44% of its workforce but account for only 5% of the output. It has 166 such mines out of a total of 360. Company executives say most of these mines came to the company after nationalisation. They produce better quality coal but costs are higher.

Coal India has firmed up plans to offer underground coal blocks to global mine developer and operators (MDOs) to extract coal efficiently and profitably. Supervision and statutory manpower, however, would be provided by Coal India.
It will enable the company to increase present level of production from such mines, hovering around 30 million tonnes over the last two years, to around 100 million tonnes by 2024—almost 10% of the total targeted quantity, company executives said.

Coal India uses MDOs for open cast but underground mines are run by its own workforce. At a later stage, MDOs are likely to be appointed for existing underground mines.

At present, bulk of Coal India’s open cast production is undertaken by MDOs, which produce coal more efficiently.