Western Coalfields (WCL) is planning to invest Rs.200 crore to open four new mines in Vidarbha with a combined capacity of 3.65 million tpa for supply to the state electricity utility's thermal power plants in the region.

The company is in the final stages of talks and is on the verge of signing an agreement with Maharashtra Generation Co (Mahagenco).

Three of these mines are open cast while one is an underground mine. They include, Durgapur extension, Bhatadi extension, Junad and Deep Waghoda underground mine. The coal company expects to produce 2 million tpa from Durgapur, 0.65 million tpa from Bhatadi extension, 0.60 million tpa from Junad Deep and 0.39 million tpa from Waghoda underground mine.

The projected capital investment for the mines is Rs.40.48 crore in Durgapur extension, Rs.74.29 in Bhatadi extension, Rs.30 crore in Junad Deep and Rs.55.15 crore in Waghoda underground.

It is learnt that WCL was unable to open these mines as the expected internal rate of return (IRR) had been calculated at less than 12 per cent. Coal India has stipulated that new mines should have an IRR of more than 12 per cent. The mines can however, be operated if the coal company can find some consumer who is prepared to accept coal on a cost plus basis formula.

The WCL is already operating two mines, Adasa underground having an annual capacity of 0.21 million tpa and Kolgaon open cast with 0.40 million tpa capacity on cost plus basis on an agreement with Mahagenco.