Power Mech Projects Ltd (PMPL), one of the leading industrial services and construction companies providing versatile and comprehensive services in India’s power and infrastructure sector, has been awarded a huge Mine Development & Operation (MOO) contract for the Tasra open cast coking coal project located in the Jharia Coal Fields in Ohanbad, Jharkhand state. The contract was awarded by the Steel Authority of India Ltd for an estimated value of INR30,438 crores over the contract period which equates to over US$3.7 billion.
The MOO contract will primarily comprise mine infrastructure development, removal of overburden and extraction of coking coal, plus its crushing and transportation, setting up a coal washery of 3.5 Mt/y capacity, supply of steel grade coking coal to SAIL, carrying out R&R activities and other activities incidental to mining as per the project document.
The project has total coal extraction reserves of 96.78 Mt with an annual capacity of 4 Mt/y and overburden removal during the project period is over 535.29 MBCM. The concession period of the mine is 28 years including two years of development.
The project has been awarded to a consortium of Power Mech Projects and PCPatel Infra, wherein PMPL is the consortium leader with a 74% equity stake and PCPatel Infra with a 26% stake. A Special Purpose Vehicle (SPV) will be formed to undertake the project. PC Patel has been in the mining sector for over 20 years and has a lot of experience in handling different kinds of mining contracts.
Commenting on the project award, Sajja Kishore Babu, Chairman and Managing Director of PMPL said:
“This project will further strengthen our robust order book and enable the Company to diversify its order book which is in line with its strategy to have an optimum mix between power and non-power segments. This mine has all statutory approvals in place and it is a ready to mine project. The revenue booking can be started from FY24 onwards. This project can add peak turnover of around INR1,200 crores plus escalation annually. With the revenue coming in from both the MOO projects along with the existing operation & maintenance (O&M) business, we expect to witness sustainable growth both in top and bottom lines in the future for a longer period.”
India is very dependent on costly imports for meeting its coking coal requirements and Tasra is another important step for SAIL and the country to meet the growing demand of coking coal. The KBP and Tasra MOOs together will generate 9 Mt/y when the peak capacities of the respective mines are achieved.
This project is a strategic step in forward integration in PMPL’s activities, utilising its technical know-how along with project implementation capability. PC Patel’s technical expertise will combine with PMPL’s core capabilities in the field of EPC contracts, plant installation, civil & structural works, material handling, infrastructure construction and project management coupled with operation & maintenance expertise. PMPL has already established substantial in-house capability in executing large capacity material handling contracts and this experience will greatly help in the overall development of the project.
