Power Mech Projects Limited (Power Mech), one of the leading industrial services and construction companies providing versatile and comprehensive services in power and infrastructure sectors, has been awarded a Mine Development and Operation (MDO) project from Central Coalfields Limited (CCL), a subsidiary of Coal India Limited, aggregating to Rs 9,294 cr over the contract period.

The MDO contract will primarily comprise of mine infrastructure development, removal of overburden and extraction of coking coal, processing, crushing and transportation of coal up to washery of CCL, carrying out R&R activities and any other activities incidental to mining as per the project document at Kotre Basantpur Pachmo OCP located in Ramgarh and Bokaro Districts, Jharkhand. The project has total coal extraction capacity of approximately 105 million MT with an annual capacity of 5 million MT and overburden removal during the project period is over 539 MBCM. The concession period is 25 years including two years of development period with an option of extending the contract for a period of another 10 years with the consent of both the parties (with this the total contract period will extend up to 35 years).

The project has been awarded to a consortium of Power Mech Projects Limited and AMR India Limited wherein Power Mech is the consortium leader with 74% equity stake and AMR India will hold 26% stake. A Special Purpose Vehicle (SPV) – KBP Mining Private Limited has been formed to undertake the project. AMR India Limited, a two-decade old company, has also been engaged in contract mining involving operations like removal of overburden, mining of coal or lignite, and logistics. The SPV will have material handling expertise of Power Mech in Project Development and the technical expertise of AMR India in the field of greenfield mining project development.

Commenting on the project award, Sajja Kishore Babu, Chairman and Managing Director said,
“Power Mech Projects Limited has been a leading player in the infrastructure sector and has developed an expertise in projects of this scale and magnitude. This project is a strategic step forward in the company’s journey, utilising the technical know-how and further establishing the company’s position.

The material handling expertise of the Company in project development combined with the technical expertise of AMR in the field of greenfield mining project development, will greatly help in the overall development of the project which will result in achieving of the targets given by Coal Mining and Service Agreement.

Mine Development Operations requires a robust decentralised team that needs to be on its foot all the time. The company has facilitated this by forming a separate Strategic Business Unit and by setting up a regional mining headquarters in Ranchi, Jharkhand with minimum reliance on the HQ.

This project will strengthen the already robust order book even further and enable the company to diversify its order book which is in line with its strategy to have an optimum mix between power and non-power segments. Once operational, the project will add more than Rs 400 cr annually to our top line. With the revenue coming in from the O&M business and this MDO projects, we expect to witness sustainable revenue with higher margins in the future for longer period.”