State-owned Coal India will shut nearly 100 unprofitable mines over the next two-three years. Of these, 37 will close down operations this year.
The coal PSU had shut down 15 mines last year. “We have engaged Indian School of Mines and expertise of Singareni Collieries to chart out a roadmap for the set of 90 mines,“ a company executive said. “They would submit their study soon on the basis of which we would either merge a few of these mines with existing ones or change the method of operations in these mines,” he added.
The CIL executive said opening new mines and shutting unviable ones is a continuous process. The company began with 750 mines but now has 394. Low grade coal extracted from mines that produce less than one million tonnes a year are generally considered unprofitable as the scale of operation in
them do not support the cost involved visà-vis the price its coal fetches.
“Cost of operations at underground mines is also very high,“ he said.
CIL was also recently hit when the Coal Controller of India downgraded 50% of its 394 mines, meaning they are fetching lower prices for the coal produced compared to what they were fetching in 2016-17.
“Downgrading of mines has also hit viability of a large number of mines, which are now being considered for closure,“ another CIL executive said.