West Perth-based India announced the signing of a letter of intent with Bankura DRI Mining Manufacturers Company, a special-purpose vehicle set up by six sponge iron manufacturers to mine coal from the Biharinath block in the Raniganj Coalfield.

News of the deal saw India’s share price jump to an intraday high of 5.3c, up 1.6c or 43%, with more than 113 million shares changing hands by the final bell.

India and Bankura have agreed to mine and supply coal to Bankura at a rate per tonne of coal loaded onto Bankura’s trucks.

India will deliver 30,000 tonnes of coal per annum in the third year, ramping up to 480,000tpa in the seventh year of operation.

The company will receive $1.2 million from Bankura to begin final design and initial mobilisation work.

India has six months to establish funding for the infrastructure program.

The capital required for the project is to be finalised and will be funded by a combination of current funding, further capital raising and debt facilities.

A two-month time frame to sign the final contract has been agreed to by both parties.

The Biharinath block lies some 120 kilometres from India’s Surda copper project.

The block is undeveloped and has been defined by 56 diamond drillholes for 27,072m of core.

Shares in India cooled to close the day at 4.8c, up 1.1c.