Three firms bid to explore CIL's Mozambique block

Three Indian companies are bidding for a Coal India Ltd contract to explore the 205 sq km coal block awarded to it in Mozambique.

CIL, the world largest coal miner, is in the process of examining the bids by Mining Associates, Indu-CBS Joint Venture and Kartikeyan Pvt Ltd, which it opened last week. It is now expected to award the contract within 45 days.

Coal India Africana Limitada (CIAL), a wholly-owned subsidiary of CIL, won a five-year licence for exploration and development of two coal blocks in Mozambique in August 2009.

"We have asked the parties concerned to justify the price bids following which we will scrutinise them and finalise the lowest bidder," A K Singh, chairman and managing director at the Central Mine Planning and Design Institute, which is CIL's technical arm that finalises and floats tenders, said on Wednesday.

In February, it invited exploration bids for A1 and A2 mining blocks in the north-western province of Tete. In May, three parties submitted their bids. The final selection was to be completed by July. However, there were some issues with respect to the currency in which the bank guarantees were submitted by the bidders. This forced CIL to scrap the bids and call for fresh ones.

Coal India hopes to start the first phase of production by 2013-14. With an initial estimated reserve of 1 billion tonnes, the coal will be imported to cater to domestic demand from customers in Western India. It is an exploratory block, and preliminary estimates suggest that it could have a reserve of about 1 billion tonnes.