A Power Mech Projects-led consortium has received a contract from Coal India subsidiary Central Coalfields (CCL) to develop and operate the Kotre Basantpur Pachmo open cast coal mining project in the Indian state of Jharkhand.

The consortium is operated by Power Mech with a 74% stake while AMR India owns a 26% interest.

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The $1.25bn (Rs92.94bn) contract includes mine infrastructure development, removal of overburden and extraction of coking coal, processing, crushing and transportation of coal up to CCL’s washery.

It also includes R&R activities and any activities related to mining at the site located in Ramgarh and Bokaro Districts, Jharkhand.

The total coal extraction capacity of the Kotre Basantpur Pachmo Project is approximately 105 million tonnes (Mt) with an annual capacity of 5Mt.

The 25-year concession period, which includes a two-year development period, has options to be extended for an additional ten years.

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The two firms have formed a special purpose vehicle (SPV), named KBP Mining Private Limited, to undertake the project.

The SPV will leverage Power Mech’s material handling expertise in project development and AMR India’s technical expertise in the field of greenfield mining project development to support the overall development of the coal project.

Power Mech Projects chairman and managing director Sajja Kishore Babu said: “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.

“Once operational, the project will add more than Rs4bn annually to our top line.”