CIL arm awards ~9,294 crore of MDO projects to Power Mech
Power Mech Projects, a Hyderabad-based industrial services and construction company, said on Monday that it received a contract of ~9,294 crore for a mine development & operation (MDO) project from Central Coalfields (CCL).
As part of the Centre’s asset monetisation drive, the ministry of coal along with Coal India (CIL) and Neyveli Lignite Corporation (NLCIL) will offer 60 projects worth ~41,042 crore for private investment.
This includes 17 MDO projects to be offered to private companies, this paper had reported recently.
MDO is contractual mining under which the contractor earns revenue from production of coal and mine operations.
CCL is one of seven subsidiaries of CIL. The project has been awarded to a consortium of Power Mech Projects and AMR India. Power Mech is the consortium leader with 74 per cent equity stake and AMR India will hold 26 per cent, the company said in its BSE filing.
The MDO contract would entail mine infrastructure development, removal of overburden and extraction of coking coal, processing, crushing and transportation of coal up to the washery of CCL and carrying out resettlement and rehabilitation activities.
The project pertains to Kotre Basantpur Pachmo open cast coal mine located in Ramgarh and Bokaro districts of Jharkhand.
Power Mech, in its public statement, said the project has a total coal extraction capacity of approximately 105 million tonne (MT) with an annual capacity of 5 million MT. The contract period is for 25 years, extendable by 10 years.
“This project will strengthen the already robust order book even further and enable the company to diversify its order book, which is in line with its strategy to have an optimum mix between power and nonpower segments. Once operational, the project will add more than ~400 crore annually to the top line. With the revenue coming in from the operation and maintenance business and the MDO projects, we expect to witness sustainable revenue with higher margins in the future for a longer period,” said Sajja Kishore Babu, chairman and MD of Power Mech Projects.