Rising coal: Defunct mines now economically viable - In the news report on CNBC TV

The sudden increase in the price of coal has now made it economically viable to restart defunct mines. It was earlier reported that India Inc wanted to buy up as many defunct coal mines as possible. These mines were closed down years ago when it was too expensive to get coal out of them.

Coal is the new black gold, because prices have more than doubled in the last year, from USD 130 a tonne to USD 308 a tonne. This is reason enough for steel and power companies to try to revive long defunct mines.

Dipesh Dipu, Principal Consultant- Mining at PricewaterhouseCoopers, or PwC said, “It certainly makes sense to revive them and some of them may have been closed 2-3 decades ago when coal prices were low. It made no sense to go deeper in the underground mines or increase the depth of the surface mines.”

Experts say that there are nearly 200 to 300 such surface mines in India. Companies like Arcelor Mittal, ADAG, Aditya Birla Group and Essar have all shown interest in buying these defunct mines from Coal India.

Rajat Boral, Technical Director, Dastur & Co said, “Coal India have identified about 26 coal mines so far which can be revived and for that they are trying to put up a master plan. “

Out of these 26 mines, at least 10 have coking coal reserves, which are highly sought by steel-makers. Also, almost 350 million tonnes of coal is currently locked up in these defunct mines.
Experts also say that the spin off of these defunct mines being re-opened is that it will bring in new technology and continuous mining which is generations ahead of the board and pillar technology that is still being used in most Indian mines today. And the new technology will mean that the efficiency of Indian mines will improve by atleast 25-30%.

(You may watch the video at http://www.moneycontrol.com/india/news/business/rising-coaldefunct-mines-now-economically-viable/23/45/342541)