MINE CLOSURE REPORT FOR TARMI OCP (1.00 MTPA) (CENTRAL COALFIELDS LIMITED) JULY 2012 Regional Institute – III Central Mine Planning & Design Institute Ltd. (A Subsidiary of Coal India Ltd.) Gondwana Place, Kanke Road Ranchi-834008, Jharkhand 1 INTRODUCTION 1.1 About the Mine Tarmi OCP is a new mine with Normative Capacity of 1.00 MTPA & Peak Capacity of 1.15 MTPA in Dhori Area of Central Coalfields Ltd. Details of Mine Project Report for Tarmi OCP (1.00MTPA) with targeted capacity of 1.00 MTPA , mineable reserves of 11.63 MT, 29.41 M Cum overburden with striping ratio 2.53 Cum/MT of coal has been prepared for a life of 13 years. The EIA &EMP of Tarmi OCP was approved by MoEF vide no J- 11015/219/2007 – IA.II(M) dated 20.04.2010. The present mine boundary of Dhori Khas UG mine comprises of the following limits: North - Metamorphic Gondwana Contact East - Metamorphic Gondwana Contact South - Barkakana-Gomoh Railway Line West - Selected Dhori Opencast (Kalyani) Project 1.1.1 Name of mine owner / company Project - Tarmi OCP Area - Dhori Area Company - Central Coalfields Limited Mine Owner - Director (Technical)(Operation), CCL 1.1.2 Address for Communication Project -Tarmi OCP P.O. - Bhandaridah District -Bokaro State -Jharkhand. 1.1.3 Location of mine: The project is located in eastern part of East Bokaro Coalfield of Bermo CD block, Bokaro district of Jharkhand State. It lies between latitudes 230 45’ 25”N to 230 46’ 45”N and longitudes 860 02’ 55”E to 860 03’ 35” E. The location is shown in Plate 1. It is covered in survey of India Topo sheet no 73 I/1 & 73 I/2 (RF 1:50000). 2 1.1.4 Date of start & Life of mine: Life of mine as per PR - 13 years Estimated balance life of mine - 12 years (as on 01.04.12) 1.1.5 Total Project Area: - 258.70 Ha. 1.1.6 Communication The nearest railway station, Bhandardih on Barkakhana –Gomoh Loop line of the Eastern railway is located at a distance of 1.0 km towards south of the project. Chandrapura and Phusro railway stations are located to the east and west of Tarmi block at a distances of 6 km and 10 km respectively. The east west running gomia-jarangdih-Phusro – jainamore road, which meets the bishnugarh –petarwar road and dhanbad-ramgarh road, connects the coalfield with hazaribagh, dhanbad and ranchi. This road is located to the south of Tarmi block. The nearest air port is Ranchi at a distance of 110 km by road. 1.1.7 Topography of the area The topography of the block is rugged and is represented by the presence of pronounced hills and valleys. The ground level varies from 330 m in the north west to 215 in south (near Railway Line). The low lying area in the south represents the presence of incrop of thick Karo group of seams, while few valleys have been correlated with the surface position of faults and incrops of seam Karo – III and Karo – V. The drainage of the block is controlled by two nalas flowing north to southand located in the western and central parts of the block. These nalas drain into River Damodar in the south. This river serves as perennial source of water to the area. Drainage pattern of the block is elliptical. 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 3 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. Post mining land use plan with reclamation. 4 2.0 Financial Provisions Mine Closure activities of Tarmi OCP 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. 6.0 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 258.70 Ha, so the corpus based on August, 2009 rate is Rs. 1552.20 Lakh @ Rs. 6.0 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. 1552.20x163.50/129.60 Lakh, which comes to Rs. 1958.22 lakh. The provision for mine closure expenditure made in the accounts of 2010-11 and 2011-12 for Tarmi OCP is 187.76 Lakh. So the net corpus has become Rs. (1958.22 – 187.76) = Rs. 1770.46. 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 12 years. So, by dividing by 12 years, the annual corpus comes to Rs. 147.54 Lakh. This amount is to be deposited in escrow account every year with 5% escalation. 5 ESCROW ACCOUNT Tarmi OCP 1) Current value of Corpus (Total project 1958.22 areax6x163.50/129.6, fig. in Rs. Lakh) 2) Provision for MCP made in the accounts 187.76 of 2010-11 and 2011-12 (in Rs. Lakh) 3) Net corpus for MCP ( Total corpus - 1770.46 Provision made in the accounts of 2010-11 and 2011-12) (in Rs. Lakh) 4) Balance Life of mine as on 1.4.12 (in 12 years) 5) Annual corpus (Net corpus / Balance life, 147.54 in Rs. Lakh) Year Amount in Lakh (Rs.) 1 147.54 2 154.92 3 162.67 4 170.80 5 179.34 6 188.31 7 197.73 8 207.62 9 218.00 10 228.90 11 240.35 12 252.37 Total 2348.55 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.