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Central Coalfields Ltd awards contract to Power Mech Projects

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World Coal,


Power Mech Projects Ltd, one of the leading industrial services and construction companies providing services in the power and infrastructure sectors, has been awarded a mine development and operation (MOO) project from Central Coalfields Limited (CCL), a subsidiary of Coal India Ltd, aggregating to Rs. 9294 crores over the contract period.

The MOO contract will primarily comprise of mine infrastructure development, removal of overburden and extraction of metallurgical coal, processing, crushing, and transportation of coal up to washing with CCL carrying out R&R activities and any other activities incidental to mining as per the project document at Kotre Basantpur Pachmo OCP located in Ramgarh and Bokaro Districts, Jharkhand. The project has a total coal extraction capacity of approximately 105 million t, with an annual capacity of 5 million tpy. Overburden removal during the project period is over 539 million bank m3. The concession period is 25 years including 2 years of development period with an option of extending the contract for a period of another 10 years with the consent of both the parties (with this the total contract period will extend up to 35 years).

The project has been awarded to a consortium of Power Mech Projects Ltd and AMR India Ltd wherein Power Mech is the consortium leader with 74% equity stake and AMR India will hold 26% stake. A special purpose vehicle (SPV) (KBP Mining Private Ltd) has been formed to undertake the project. AMR India has also been engaged in contract mining involving operations like removal of overburden, mining of coal/lignite, logistics etc. The SPV will have material handling expertise of Power Mech in project development and the technical expertise of AMR India in the field of greenfield mining project development.

Sajja Kishore Babu, Chairman and Managing Director of Power Mech, said: “Power Mech Projects has been a leading player in the infrastructure sector and has developed an expertise in projects of this scale and magnitude. This project is a strategic step forward in the company's journey, utilising the technical know-how and further establishing the company's position.

“The material handling expertise of the company in project development combined with the technical expertise of AMR in the field of greenfield mining project development, will greatly help in the overall development of the project which will result in achieving of the targets given by the coal mining and service agreement.

“MOO requires a robust decentralised team that needs to be on its foot all the time. The company has facilitated this by forming a separate strategic business unit and by setting up a regional mining headquarters in Ranchi, Ihorkhand, with minimum reliance on the HQ.

“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 non-power segments. Once operational, the project will add more than Rs. 400 crores annually to our top line. With the revenue coming in from the O&M business and this MOO projects we expect to witness sustainable revenue with higher margins in the future for longer period.”

Read the article online at: https://www.worldcoal.com/coal/30062021/central-coalfields-ltd-awards-contract-to-power-mech-projects/

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