Power Mech Projects Ltd, a company that specializes in industrial services and construction for the power and infrastructure sector, has successfully secured a significant mine development and operation (MDO) project from the Steel Authority of India Ltd. (SAIL) valued at approximately ₹30,438 crore over the contract period.
The project involves the development of the Tasra open cast mine situated in the Jharia Coal Fields in Dhanbad, Jharkhand. The concession period for the mine spans 28 years, including two years dedicated to the development phase.
Under this contract, Power Mech Projects will be responsible for various tasks such as mine infrastructure development, overburden removal, and coking coal extraction. Additionally, they will handle tasks like crushing, transportation, setting up a coal washery with a capacity of 3.5 MTPA, supplying steel grade coking coal to SAIL, conducting rehabilitation and resettlement (R&R) activities, and other mining-related activities outlined in the project document.
The Tasra project boasts an impressive total coal extraction reserve of 96.78 MT, with an annual capacity of 4 MTPA. Furthermore, it is estimated that over 535.29 MBCM of overburden will be removed during the project’s duration.
Power Mech Projects, in partnership with PC Patel Infra, has been awarded the project. As the consortium leader, Power Mech Projects holds a 74% equity stake, while PC Patel Infra holds the remaining 26%. To effectively execute the project, a special purpose vehicle (SPV) will be formed.
Chairman and Managing Director of Power Mech Projects, Sajja Kishore Babu, expressed optimism about the project, stating that it will bolster their order book and provide a well-balanced mix between power and non-power segments. He also emphasized that the project is fully equipped with all the necessary statutory approvals and is ready for mining operations. The company is projected to start booking revenue from the project in FY24, with an estimated peak turnover of around Rs. 1,200 crore annually, including escalation.
The Tasra project holds strategic significance for India, as the country heavily relies on expensive imports to meet its coking coal needs. With this project, SAIL aims to address the growing demand for coking coal and reduce the dependency on imports. Together with another project, KBP, the Tasra MDO project will contribute to generating 9 MTPA of coking coal when both mines achieve peak capacities. This locally extracted coking coal will serve as a cost-effective alternate,tive to imported coal, leading to substantial savings in foreign exchange.
For Power Mech Projects, this project signifies a strategic step forward in enhancing its capabilities and utilizing its technical expertise in project implementation.