Announcement of World Bank Providing Two Hundred Forty-Eight Million Dollar Loan for Coal Mine Development in India on March 11, 1985

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. BANK NEWS RELEASE NO. 85/32 Contact: P.B. Sison March 11, 1985 (202) 477-3573 WORLD BANK PROVIDES $248 MILLION LOAN FOR COAL MINE DEVELOPMENT IN INDIA The World Bank is providing a loan of $248 million to support the development of two coal mines and associated facilities in the Jharia coalfield in Bihar State in India. The project is estimated to cost $696 million. Coal is India's most abundant indigenous source of energy. It provides more than 50 percent of the country's commercial energy consumption. An open-pit mine and an underground mine will be developed under the project. The two mines are expected to produce a total of 5.5 million tons of raw coking coal a year. The underground mine, called Pootkee-Bulliary, will be the largest mine of its kind in India. The project includes two coal washeries and coal handling plants. Infrastructure such as railway spurs, workshops, and warehouses will be constructed. Offices and town sites will also be established. The mines will use highly mechanized mining systems, which should improve the efficiency of operations. The project will help to improve the quality of coking coal supplied to the steel industry by providing coal with significantly lower ash content. Further, the project will help to reduce India's need for imported coking coal. Technical assistance will be provided to improve the planning, design, and management of underground mines using fully mechanized mining systems. Studies will be carried out to examine alternative ways of transporting materials such as sand and gravel to the coalfields. Water and air quality in the mines will be monitored regularly and dust, a potential pollution hazard, will be controlled by ventilation. Land erosion control and prevention measures will include revegetation and land turfing. Besides the World Bank loan, other financing for the project will will be provided by the Government of India ($85.8 million) and the Overseas Development Administration of the United Kingdom ($14.2 million). Equity contributions from the government ($215.8 million) and Coal India Limited ($132.2 million) will complete the financing plan. Coal India Limited is a holding company which accounts for nearly 90 percent of India's coal production. The World Bank loan is for 20 years including five years' grace, with a variable interest rate, currently 9.29 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.