The Mine Developer and Operator (MDO) model will assume greater relevance because of upcoming projects like EMIL’s Madanpur South mine, Dilip Buildcon’s operations in Rajmahal Coalfield, Adani coal project in Gare Pelma-III coal block and VPR coal pits, among others. A Right to Information (RTI) query has revealed that at least 28 coal mines in India are run by private companies under the Mine Developer and Operator (MDO) model. The country’s coal industry relies heavily on the MDO model which has been adopted and adapted to the Indian scenario. It has been a major factor in the sector’s steady growth over the years, bringing in the much-needed capital to finance projects.
Under this, Public Sector Undertakings (PSUs) lease out mines to private players resulting in numerous undertakings like Sical, EMIL, Dilip Buildon and Adani coal project. MDOs are expected to undertake the development of the mine, from planning, design and construction to operational functions like mining, removal and delivery. This means that the MDOs like EMIL and Adani are expected to tackle hurdles on their own before the coal projects get underway. In addition, MDOs are also expected to address the environmental and resettlement issues of the local populace. However, this has not been seen as a deterrent as new MDOs join the bandwagon.
The newest MDO entrant is Dilip Buildcon that won the contract for the Siarmal mine in Odisha. It is for a period of 25 years, with the overall contract valued at Rs 36,419.07 crore. The first MDO in India was EMIL, Aditya Birla Group’s mining wing. It became the largest private MDO operator in the country when it was awarded the Bhubaneshwari open cast project.
Adani Enterprises started its operations in 2013 at the Parsa East-Kente Basan mine in Chhattisgarh. Although owned by the Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL), Adani runs the coal project as an MDO. This was the first amongst the four MDO contracts bagged by the group. Ghidmuri Paturia, Gare Pelma, Talabira and Sulyari coal blocks are other sites of Adani coal projects.
Other notable mentions include VPR Mining with its overburden removal work and Sical Logistics with its overburden and coal mining work.
Additionally, coal projects are profitable investments for entities like Adani, who also have a stake in power generation. Even steel producer SAIL, NTPC and various State Governments have embraced the MDO model, choosing to forgo mining operations on their own. However, the potential gains are offset by the fact that penalties must be paid by MDOs for any shortfall in quantity, quality and delays in development.
Additional blame is heaped on them for all the inconveniences mines cause although they have no right to the ownership of said mines. Nevertheless, these setbacks are a small price to pay, given the huge potential of the coal industry.
The Mine Developer and Operator (MDO) model will assume greater relevance because of upcoming projects like EMIL’s Madanpur South mine, Dilip Buildcon’s operations in Rajmahal Coalfield, Adani coal project in Gare Pelma-III coal block and VPR coal pits, among others.