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State-owned NMDC is keen to enter into coal mining with Coal India Ltd (CIL) as a partner. NMDC, the iron ore mining major, has sought a coal block in Birbhum district of West Bengal, where coal reserves are estimated to be above 19 billion tonne.NMDC officials told FE the joint venture (JV) with CIL will only be formed if the coal ministry bypasses the auction route and allots the Deocha Pachami coal block in Birbhum, for which it has applied."In fact, it is CIL, which has taken the lead, to form a JV and has written to the ministry for an in-principle approval of allocation," the official said.CIL chairman Partha S Bhattacharyya, confirming the development, told FE if the ministry gives an in-principle approval "of allotting the block at government dispensation then both NMDC and CIL can take talks forward on the JV"."The West Bengal government is also keen to join the JV," Bhattacharyya added.The new coal distribution policy has a provision of allotting coal blocks under the ministry's dispensation besides taking the auction route. The auction route is supposed to be taken mainly for allotting captive mines but the state agencies have also been asked to take blocks through auction.In early 2009, NMDC and West Bengal Mineral Development & Trading Corporation signed an agreement to undertake mining of Deocha Pachami coal block, which was then earmarked to come under the dispensation of the West Bengal government. But with the Centre proposing to auction coal blocks replacing allotment on the basis of screening, Bengal feared that it will not have any blocks under its dispensation."We have asked for the block under government dispensation and we hope to get it," Bhattacharyya said.He said the coal block was rocky with thick seams and it required rock mining. NMDC had the experience of drilling in such terrain and combined with CIL's experience it will be an efficient exploitation of coal from such an area.The block, if developed, will make a fantastic open cast mine and besides, coal will also produce rock pieces, a valuable construction material, Bhattacharyya said.The rock pieces will be a part of the overburden removal, which CIL doesn't have the authority to sell. CIL has the authority to sell only soil overburden or overburden as such which are less valuable than coal. The rock pieces, which will be produced in the course of mining, is likely to be costlier than coal, the NMDC official said.
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