West Bengal is looking at the possibility of merchant mining as a new revenue stream with the Centre allotting it the Deocha Pachami coal block, which holds one of the world’s largest reserves. West Bengal finance, commerce, industry and IT minister Amit Mitra, inaugurating the global mining summit, said, “We want to use Deocha Pachami for merchant mining after meeting our coal requirement for power plants.”
The Centre allotted Deocha Pachami to West Bengal Power Development Corporation (WBPDCL) on June 6 this year and WBPDCL is yet to start exploration to determine the proven reserves. While the block, Mitra said, is the world’s second largest coal block and Asia’s largest coal block with estimated reserves 2102 million tonne, exploration activities will determine the proven reserves.
“With this huge reserve, we are optimistic about merchant mining in the long run and hope to get the Centre’s permission for that,” Mitra said. WBPDCL will mine rocks; thereafter the coal extracted from the mine will be used for captive purpose to fuel Phases 3 and 4 of WBPDCL’s Santhaldih thermal power units and a unit of WBPDCL’s Sagardighi thermal power plant. When mining in the block reaches an optimal stage, WBPDCL can take up mining the coal for commercial exploitation, Mitra said.
He said that the block has a potential to attract investment between `60,000 crore and `100,000 lakh crore and can generate 1.10 lakh jobs. West Bengal is opmistic about developing mining as a new vertical for the state to generate revenue. In the last five years there has been more than a fivefold increase in the state’s revenue from minor minerals. Revenues for the state from minor minerals has jumped to `574 crore in 2017-18 from `88 crore in 2010-11. Revenue from major minerals has been `1,690.62 in 2017-18, of which coal has contributed `1,657 crore, Mitra said.
He said the state was planning a mining equipment hub, with Tata Hitachi as an anchor investor, in Kharagpur. It was also looking to set up a precision hub, which would develop software to drive large machines.
Tata Hitachi, which already has operations in Kharagpur on 250 acres, is in an expansion mode. Sandip Singh, the company’s managing director, said that while the company has been producing 47-tonne, 65-tonne and 120-tonne equipment in Kharagpur, they were at present doing a feasibility study to manufacture 87-tonne equipment, which are imported from Japan. They were also putting up a remake facility to refurbish the older excavators and pay loaders. This could entail an investment of `250 crore in two plants at Kharagpur and Dharwar. With the mining market on the growth path, Tata Hitachi wants to make its Kharagpur unit the largest heavy equipment-manufacturing unit in South Asia. It aims to produce more than 3,500 machines this fiscal.