The Client has been allocated a Coal mine in the State of Chhattisgarh and has been facing issues with respect to higher ash percentage in coal supplied from the mine. The Client desired a detailed introspection regarding the prospects of coal washing, associated costs and alternative transportation avenues. Apart from the above, bulk of the assignment required Mercados to propose changes in the existing contract with the Mine Development Operator to accommodate the changes in the transportation of coal and inclusion of additional element of coal washing. Besides, mechanism of washery rejects in line with the recent notifications was also to be gauged along with alternative considerations.

The detailed scope of work included two modules viz., Feasibility of modification in MDO contract to include transit of coal through Washery Circuits and Techno-commercial feasibility of washed coal utilisation in CSPGCL stations. As part of the first module, Assessment was made with respect to contractual rights of CSPGCL in proposing any modification in contract and conditions for such modification. The existing cost structure of MDO was examined to identify the possibility of modification in such charges especially with respect to transportation cost of coal from mine end to railway siding vis-à-vis the change in transportation of coal from mine to Washery. Amendments were proposed accordingly in the clauses of MDO agreement.

As part of the second module, Mercados assessed the overall quantum of coal that would be routed through the washery circuit and the overall implications of inclusion of washery operations on the landed cost of coal based on tentative cost of washing, feasibility of land for putting up washery operations within/proximity of the mine area. Besides, Mercados worked out the overall benefits of coal washing on the landed cost of coal in Rs/kCal terms, savings in transportation cost of washed coal and other associated factors such as reduced ash handling requirement and cost of ash disposal.