Under the deal, Thiess will develop and operate the greenfield Pakri Barwadih coal mine in the state of Jarkhand in eastern India.
India has been increasingly relying on imported thermal coal despite its reserves of this commodity and this mine is just the first of six NTPC has earmarked to develop to provide a lower cost solution.
To be executed by its 90%-owned Indian subsidiary Thiess Minecs, the major contract covers construction of site infrastructure and coal processing “plants” for the first two years.
Thiess will manage operations afterwards, which includes overburden removal, coal mining, plus operating the processing and rail-loading facilities over the 22 years of expected mine life.
The largest coal contract miner said production would reach 15 million tonnes per annum over the first three years of mining and more than 300Mt will be mined over the contract.
Thiess mining chief executive Bruce Munro said the Pakri Barwadih contract was a platform to build a contract mining business in India which was a long-term goal for the company.
“India has the fourth-largest coal reserves in the world and is the third-largest producer,” Munro said.
“We believe this project will lead to more opportunities for Thiess in India, particularly given the strong economic growth currently occurring.”
Thiess plans to recruit locally in India plus introduce virtual training simulators.
Federal Resources and Energy Minister Martin Ferguson congratulated Thiess on its milestone Indian contract.
“Australia is a world leader in mining technology and techniques,” he said.
“This, coupled with our experience in managing a multicultural workforce, gives Australian mining services companies a real competitive advantage.
“We don’t just have the minerals the world needs, we have the expertise to enable other countries to make the most of theirs.
“With the growth in energy demand we are seeing in countries like China and India, the potential for Australia's mining services exports is increasing.”
While India seeks to ramp up its thermal coal production, the country lacks coking coal and will continue to import this commodity at an increasing rate for its significant steelmaking industry.
Leighton shares are up 1.4% to $31.71 this morning.