SAIL had committed over 300 million rupees ($A9 million) to introduce two longwall faces at the Moonidih mine, BCCL chairman-cum-managing director Partha Bhattacharyya told The Statesman.

The deal, aimed at revitalising BCCL’s slumping coal production, would be paid in two payments of Rs166 crore and then Rs145 crore. In exchange 1.2 million tonnes of coking coal output from the Moonidih mine would be supplied to SAIL.

Over the last five years BCCL has incurred huge losses amounting to Rs3800 crore, resulting in a drop-off of investment in new equipment. The move saw coal production decline from levels of around 27.9Mt in 1999-2000 to 22.68Mt in 2003-04.

Bhattacharyya said as part of the revival plan the company had identified and cleared worn-out equipment with around 20Mt capacity to pave the way for an infusion of new equipment.

The company has put out global tenders for delivery of the first package by 2007-08.

Bhattacharyya also said talks were underway with SAIL and Tata Steel to develop the Kapuria block through underground mining as a joint venture.

Jumps in the price of coking coal have created an opportunity for BCCL to bed down a higher price for its washed coking coal supplies to the steel sector. SAIL and BCCL have agreed to create a 22% margin for prime washed coking coal and over medium washed coking coal.