India’s state owned power-generation company NTPC is in the process of awarding a contract worth $4bn to start its first coal mine in the country.
A venture of Thriveni Earthmovers and Sainik Mining won the auction held by the power-generating company for the Pakri Barwadih mine in Jharkhand.
The company quoted $4bn for the development and operation of the mine for over 25 years.
Bloomberg cited people familiar with the matter as saying that the production from Pakri Barwadih is expected to start on April 1 2016.
The mine is expected to yield NTPC about 310 million tons of coal during 25 year operation.
According to reports, the state-run utility will be able to save on the expenses for coal import since it will have its own supply.
NTPC has to pass the benefits of lower fuel costs to customers; the move may boost sales to state electricity retailers that have been cutting back on purchases because of a lack of funds.
Further details of the bidding have not been disclosed by any of the companies.