New Delhi: Tata Steel and SAIL's equal joint venture, S&T Mining Company, will set up a 1.8 million tonnes per annum (mtpa) coal washery at Bhelatand, in Jharkhand, through an investment of Rs 200 crore.

S&T Mining Company was formed with the ambit of joint acquisition and development of mineral deposits and mining of minerals, including exploration, development and beneficiation of identified coking coal blocks.

Washed coal has higher calorific value than unwashed coal and helps improved power generation efficiencies.

A source close to the development said a detailed project report has also been prepared for the proposed washery.

The SAIL-Tata Steel joint venture had earlier proposed to set up the washery at Malkera, but was forced to shift the site to Bhelatand because of the high investment cost.

S&T Mining Company was exploring the possibility of installing a 1.5-mtpa coal washery at Rs 196 crore investments. The Terms of Reference for an environmental study on the potential impact of the project were also received from the Ministry of Environment and Forests.

Coal is washed to reduce the ash content and improve its calorific value. The average ash content in Indian coal is 35-38 per cent and washing helps reduce it by 7-8 per cent.

S&T Mining Company has also submitted a tender to Bharat Coking Coal for setting up a coal washery at Dugda.

The joint venture company is attempting to acquire and develop coal assets in India. It has been short-listed among 10 parties by Coal India for reviving the Navratna firm's abandoned coal mines.

It is also making attempts to develop Bharat Coking Coal's Bhutgoria mine. An investment of Rs 42 crore for development of the mine has been approved by the SAIL Board.

India does not have enough reserves of coking coal in qualities required for iron and steel making. Only 30 per cent of SAIL's requirement is met from indigenous sources and the remaining 70 per cent is met through imports.

State-run Coal India (CIL) recently said it plans to invest around Rs 2,500 crore to set up 20 new coal washeries with a combined capacity of 111.10 million tonnes to unlock the value of its sizeable, but poor quality reserves in the country.

CIL currently operates 17 coal washeries, out of which 11 are coking coal washeries and six are non-coking coal, with a total capacity of 39.40 MTPA.