Neyveli Lignite Corp to outsource mining

August 7th, 2008 - 12:16 pm ICT by IANS  

By Venkatachari Jagannathan
Chennai, Aug 7 (IANS) Integrated mining and power company Neyveli Lignite Corp Ltd (NLC) is expected to save around Rs.3 billion by outsourcing lignite mining at its Barsingsar open cast mine in Rajasthan. NLC plans to mine 2.1 million tonnes of lignite annually at Barsingsar, where it is also setting up a 250-MW power project.

“The initial capital expenditure estimate for the mine was Rs.5.51 billion. When the decision to outsource the mining activity was taken, this came down to Rs.2.54 billion,” B. Surender Mohan, NLC’s director (Mines), told IANS.

NLC first outsourced the overburden removal - removing the soil over the lignite seam - to Ranjit Constructions at Rs.45 per cubic metre.

The stripping ratio - the amount of overburden removed to mine one tonne of lignite - in Rajasthan is lower than in Neyveli.

“The overburden removal contract is for seven years. Now that the lignite seam has been exposed, NLC is in the process of finalising the outsourcing tender for mining,” Mohan said.

Unlike the Neyveli mines located 200 km from Chennai, where NLC uses several huge bucket wheel excavators, each costing nearly Rs.1 billion, and several kilometres of conveyor belts to carry the overburden and lignite to bunkers, the Barsingsar mines will use a shovel-dumper combination.

“There will be lignite crushing units inside the Barsingsar mine,” Mohan said.

“We have introduced a technology in bucket wheel excavators and conveyor systems so that the machine speed gets adjusted automatically based on the load it carries. This in turn saves power,” he added.

NLC is now planning to automate the bunker lignite loading systems and the mining activity.

As Barsingsar is a fresh site, NLC will not be burdened with legacy issues, such as high cost and a low productive workforce totalling over 25,000, that it faces at Neyveli.

The decision to outsource will also cut recurring expenditure like salaries and perks.

“The lowest grade worker at Neyveli gets around Rs.12,500 a month as pay apart from free housing, medical facilities and other perks,” said P. Baburao, director (Personnel).

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