Mine Closure Report

MINE CLOSURE REPORT

FOR

SAYAL‘D’ UNDER GROUND PROJECT (0.32 MTY)

(CENTRAL COALFIELDS LIMITED)

AUGUST 2012

Regional Institute – III Central Mine Planning & Design Institute Ltd. (A Subsidiary of Coal India Ltd.) Gondwana Place, Kanke Road Ranchi-834008, Jharkhand

INTRODUCTION

1.1 About the Mine

Sayal’D’ is an existing underground mine. Since its inception, the maximum production was 0.597 MTPA in the year 1976-77. Presently, the following seams are being worked at Sayal ‘D’ UGP:

(i) Lower Semana Seam (Mine No. 3): This seam is under development by Bord & Pillar method by manual loading of coal. The productivity activities are being carried out in a limited way by operating in one shift only.

(ii) Saunda Seam (Mine No. 5) : This seam has been mostly developed in entire available mining area by keeping a barrier against the depillared underlying Kurse, Nakari and Upper Semana seams. Some of the panels have been already been depillared. The production activities have been temporarily suspended in the seam due to non-availability of surface land required for depillaring.

(iii) Sayal Seam (Mine No. 10): This seam is presently under development by Bord & Pillar method using mechanized loaders (SDLs). At present three SDLs are in operation.

The life of the mine is 26 years.

Details of Mine

Sayal’D’ is an existing Underground Project with 0.32 MTPA normative capacity & 0.37 MTPA peak capacity .Total balance mineable reserve is 8.30 MT. Grade of coal is ‘D’ to ‘G’ and life of project is 26 years. Mining will be done by bord & pillar (B&P) method of mining with manual loading, as well as mechanized loading by deployment of SDLs, onto coal tubs at the coal faces in the working panels. Produced coal will be supplied to basket linked consumers. The present mine boundary of Sayal’D’ UG mine comprises of the following limits: North : Common boundary between Sayal D block and Sayal A & Associated Karanpura blocks. South : Southern limits of South Sayal block East : Common boundary between Sayal D & South Sayal blocks and western boundary of Khas Karanpura, Saunda & Central Saunda blocks/mine. West : Damodar River and western boundary of South Sayal block.

1.1.1 Name of mine owner / company Project - Sayal’D’ UGP. Area - Barka- sayal Area 2 Company - Central Coalfields Limited Mine Owner - Director (Technical)(Operation), CCL

1.1.2 Address for Communication

Project - Sayal’D’ UGP Nearest Railway station - Sayal’D’ UG project is connected by a all weather road with the Pataratu railway station on the Gomoh-Dehri-on-Sone loop line of the East Central Railway. District - Ranchi. State -Jharkhand.

1.1.3 Location of mine:

The Sayal ‘D’ UGP is located in the central part of South Karanpura Coalfield and is within Ramgarh District of Jharkhand State. The Sayal ‘D’ UGP fall under the Survey of India Toposheet Map no. 73E/6 on scale - 1:50000. The geographical coordinates of the Sayal ‘D’ UGP falls within latitude: 23040’30”N to 23041’34”N and longitude 85018’35”E to 85020’30”E.

The Patratu railway station is just south of the block (about 100m) on Dehri- on-Sone-Gomoh broad gauge rail loop line. The State Highway Ranchi- Ramgarh (on National Highway-33) via Patratu and Bhurkunda passes the mine block for about 1.5 km on the south of block. Ramgarh town is at distance of about 20 km from the project. Ranchi, the state capital of Jharkhand, is at a distance of about 50km (via Patratu). The nearest air port is at Ranchi at a distance of 50 km by road.

Area - SK area Latitude - 230 40' 30" and 230 41' 34" N Longitude - 850 18' 35” and 850 20' 30" E

1.1.4 Date of start & Life of mine:

Estimated balance life of mine - 30 years (as on 01.04.12)

1.1.5 Total Lease Area of the mine : - 416 Ha.

1.1.6 Communication

The Sayal ‘D’ UGP is located in the central part of South Karanpura Coalfield and is within Ramgarh District of Jharkhand State. The Patratu railway station is just south of the block (about 100m) on Dehri-on-Sone- Gomoh broad gauge rail loop line. The State Highway Ranchi-Ramgarh (on National Highway-33) via Patratu and Bhurkunda passes the mine block for about 1.5 km on the south of block. Ramgarh town is at distance of about 20 km from the project. Ranchi, the state capital of Jharkhand, is at a distance of about 50km (via Patratu). The nearest air port is at Ranchi at a distance of 50 km by road.

1.1.7 Topography of the area

The topography of the area is gently undulating. The surface RL varies from 340m to 390 m. The Damodar River, flowing eastwards, skirts around the western limit of the block/mine and it provides the main drainage outlet. The average annual rainfall of the area is around 1500mm, most of the precipitation of which is during the monsoon season with some winter rains.

1.2 Reasons for Closure

To restore the disturbed area after extraction of planned quantity of coal, to the acceptable limit of local community and regulatory authority.

1.3 Need of mine closure planning

1.3.1 Mining activities leave long lasting impacts on the landscape, ecology and on local inhabitants. These activities disturb the delicate environmental and social equilibrium that exists in its area of influence. Hence, it becomes imperative on part of the mine operator to restore the equilibrium in the mine affected area that existed in the pre-mining period. Thus, any mining venture must have adequate closure plan, aimed at rehabilitation of disturbed area, which should be acceptable to local community as well as regulatory authority.

1.3.2 Mine closure encompasses rehabilitation process designed to restore physical, chemical and biological quality disturbed by the mining activities. Mine closure is not just something that happens at the end of a mine’s life rather mine closure is an ongoing series of decisions and activities beginning in the pre-mining stage of mine and ending with a sustainable site that can be returned to the community.

1.3.3 Thus, a Mine closure plan needs to define the liabilities, responsibilities and authorities of the different agencies like the mine management, other regulatory bodies, Central and State Governments after mine closure. Various objectives of the advance mine closure planning are as follows:

a. To allow productive and sustainable after-use of the site, which is acceptable to the mine owner and the regulatory authority b. To protect public health and safety c. To eliminate environmental damage and thereby encourage environmental sustainability d. To minimize adverse socio-economic impacts of mining activities e. To protect the flora and fauna of the area affected by the mining f. Effective use of the assets created in course of mining

1.3.4 Primarily, the mine closure activities are planned in two stages. The initial plan identifies the activities required to be executed as the mining activities progress after the inception of the Project. These activities may undergo subtle changes depending upon the actual site condition during implementation. Finally, a detailed closure plan is to be prepared 4-5 years before the actual closure time of the mine depending upon the existing parameters at that point of time.

. Plans Enclosed

The following surface plans have been enclosed along with this mine closure report plan:

a. Pre mining Land use plan of core zone b. Quarry & Dump Plan at the end of mining. c. Post mining land use plan with reclamation.

2.0 Financial Provisions

Mine Closure activities of Sayal’D’ UGP would be a constant exercise for the mine which would begin with the commencement of mining operations and continue till post closure. The mine closure activities would naturally entail certain expenditures, which will have to be borne by the mine operator.

2.1 Revenue expenditures

This would cover the activities which are being executed along with normal mining operation and would continue to be executed in course of execution of the Project. The cost of progressive mine closure activities is already part of the project cost.

2.2 Expenditures to be incurred just prior to actual mine closure and in the post closure period

2.2.1 As per MOC guidelines, a corpus escrow account @ Rs. 1.0 lakhs per Ha of the property leasehold shall be opened with the coal controller organization to meet the expenses of final mine closure. Thus the total expenditure on his front may be calculated in following manner:

The cost expenditure after closure of mine will be met from the corpus escrow account deposited by the mine operator. However, the additional amount beyond the escrow account will be provided by the mine operator after estimating the final mine closure cost five years prior to mine closure (as per the mine closure guideline).

The progressive mine closure will deal the land reclamation as per the calendar plan of project report. The cost of progressive land reclamation is already part of the project cost. Therefore, the escrow account for mine closure will deal only the final mine closure.

The detail of escrow account

The total mine lease area is 416 Ha, so the corpus based on August, 2009 rate is Rs. 416.00 Lakh @ Rs. 1.0 Lakh/Ha of lease area. The wholesale price index in August, 2009 and April, 2012 is 129.60 and 163.50 respectively. So the current value of corpus is Rs 416x163.50/129.60 Lakh, which comes to Rs. 524.81 lakh. The provision for mine closure expenditure made in the accounts of 2010-11 and 2011-12 for Sayal ‘D’ UGP is 45.40 Lakh. So the net 5 corpus has become Rs. (524.81 – 45.40) = Rs. 479.41. Since this is an operating/existing mine, this corpus is to be divided by balance life of mine. The balance life of the mine is 30 years. So, by dividing by 30 years, the annual corpus comes to Rs. 15.98 Lakh. This amount is to be deposited in escrow account every year with 5% escalation.

ESCROW ACCOUNT Sayal 'D' UGP

1) Current value of Corpus (Total project 524.81 areax1x163.50/129.6, fig. in Rs. Lakh) 2) Provision for MCP made in the accounts 45.40 of 2010-11 and 2011-12 (in Rs. Lakh) 3) Net corpus for MCP ( Total corpus - 479.41 Provision made in the accounts of 2010-11 and 2011-12) (in Rs. Lakh) 4) Balance Life of mine as on 1.4.12 (years) 30 5) Annual corpus (Net corpus / Balance life, 15.98 in Rs. Lakh)

Year Amount in Lakh (Rs.) 1 15.98 2 16.78 3 17.62 4 18.50 5 19.43 6 20.40 7 21.42 8 22.49 9 23.61 10 24.79 11 26.03 12 27.33 13 28.70 14 30.14 15 31.65 16 33.23 17 34.89 18 36.63 19 38.46 20 40.38 21 42.40 22 44.52 23 46.75 24 49.09 25 51.54 26 54.12 27 56.83 6 28 59.67 29 62.65 30 65.78 Total 1061.81

As per above an amount will be deposited every year up to the last year of mine life.The amount calculated by the above formula shall be deposited every year by CCL in the Escrow amount opened with the Coal Controller organization in a scheduled Bank. An agreement, outlining detailed terms and conditions of operating the said Escrow Account shall be executed amongst CCL, the Coal Controller and the commercial Bank.

However the additional amount beyond the escrow account, if any estimated later on, will be provided by the mine operator after estimating the final mine closure cost five years prior to mine closure (as per the mine closure guideline).

The details of Mine Closure Cost

The above escrow account will meet the cost of different activities of Mine Closure cost which is given in the table below:

% OF TOTAL SL. AMOUNT IN ACTIVITY MINE CLOSURE NO. LAKH (RS.) COST A Dismantling of Structures Service Buildings 3.50 38.75 Residential Buildings 37.58 416.09 Industrial structures like CHP, Workshop, 6.33 70.09 field sub-station etc. B Permanent Sealing of mine entries (incline mouth and air shaft) Sealing of incline mouth and air shaft 2.32 25.69

C Subsidence Management 1.75 19.38 D Landscaping Landscaping of the cleared land for 5.80 64.22 improving its esthetic E Plantation Plantation over the cleared area obtained 10.00 110.72 after dismantling and on other barren spaces F Monitoring/ Testing of paramaters for three years Air Quality 3.83 42.41 Water Quality 3.34 36.98 G Enterpreneurship Development 4.65 51.49 (Vocational/ skill development training for sustainable income of affected people H Miscellaneous and other mitigative 11.60 128.44 measures I Manpower cost for supervision 9.30 102.97 TOTAL 100.00 1107.21

7 Time Schedule

The closure of mines evolves environmental, technical, social aspect and financial assurance for implementing the post closure activities as per guidelines of Ministry of Coal. The post closure implementing activities will run for three years. The following activities will be implemented as per bar chart.

S.N Activities Time Half Yearly Frame 1 2 3 4 5 6 1. Preparation of Survey & 1 month Disposal Report 2. Disposal of P&M 2 and half including HEMM, CHP, years W/S, Siding 3. Dismantling of Industrial 2 years structure 4. Clearing of Coal Stock 2 years and Infrastructural Area. 5. Disposal / Dismantling of 2 &1/2 Residential colony years 6. Plantation over cleaned from 2nd land of Infrastructure. year 7. Sealing of mine entries for UG mine 8. Environmental 3 years Monitoring 9. Subsidence 3 years Management for U/G 10. Post closure subsidence 3 years monitoring for UG

The manpower for implementing the above activities with time bound manner have been provided in the subsequent chapter with cost details.

NOTE : The subsidence management of UG mines will be taken up whenever the cracks develop or the ground area subsides.