Coal revival drive: ECL reopens two closed mines under MDO model; aims to cut losses and lift output

In a major step towards restructuring its operations, Eastern Coalfields Ltd (ECL) has reopened two previously closed mines under the Mine Developer and Operator (MDO) revenue-sharing model.

The move, inaugurated virtually by Union Coal Minister G Kishan Reddy on Saturday, marks a strategic shift aimed at reviving loss-making assets and improving operational efficiency, PTI reported .

The two projects — Gopinathpur open cast in Jharkhand’s Dhanbad district and Chinakuri underground in West Bengal’s Paschim Bardhaman district — are the first ECL mines to resume production under the revenue-sharing framework. The initiative is expected to strengthen coal output, attract private participation, and support the company’s cost-optimisation efforts.

ECL Chairman and Managing Director Satish Jha said the reopening of these mines forms part of a broader restructuring strategy under which 16 loss-making mines have been amalgamated into 10 and offered to private operators through the MDO route.

The Gopinathpur open cast project has an extractable reserve of 13.73 million tonnes with a peak rated capacity (PRC) of 0.76 million tonnes per year. The MDO operator will share 4.59 per cent of revenue with ECL over the 25-year contract, which began coal production on September 13, 2025.

The Chinakuri underground project -- ECL’s first underground mine to operate under the MDO model -- holds an extractable reserve of 16.70 million tonnes and targets a PRC of 1 million tonnes annually. The operator will share 8 per cent of its revenue with ECL under a similar 25-year agreement, officials said.

ECL described the operationalisation of the two projects as a “major milestone” in its turnaround efforts, saying the model ensures a sustainable framework for cost reduction and production enhancement while leveraging private expertise in coal mining.

The company expects the MDO-based approach to improve productivity, reduce operational inefficiencies, and strengthen its overall financial performance in the coming years.