Ramnagar Colliery, located in West Bengal close to the Bihar border and once considered to be the best mine of Indian Iron & Steel Co (Iisco), has around 850 employees and workers. But many of them do not have any work as the existing underground mines have been almost exhausted and their operation has become very expensive, sources said.

However, the colliery has nearly 400 million tonnes of virgin coal that it is unable to mine owing to lack of investment.

It also has three opencast mines, of which one is run by the company itself and mining operations for the other two have been given to contractors as the management is not in a position to invest money.

The colliery does not get any money for the boiler grade coal that it supplies to Iisco's Burnpur plant. However, it sells the inferior `burnt' coal that it produces to privatebuyers.

The management can just about pay the workers from the earnings of its new opencast mine. But it does not have any money left to pay the electricity bills, cess and provident fund dues.

Moreover, almost all the equipment is 12 to 15 years old and has completed its economic working life. The opencast mine is being worked by equipment that was once declared unusable. The employees have repaired the equipment and made them operational.

Only one new shovel and two small dumpers costing Rs 4.5 crore were given to the colliery in the past three to four years and it has repaid the loan.

Iisco is not in a position to support Ramnagar Colliery as the ailing integrated steel plant itself is facing a serious resource crunch and is awaiting a government decision for its much-needed modernisation. Nor is SAIL interested in funding any Iisco unit as it is not sure whether Iisco will continue to be with SAIL in future.

However, although Ramnagar did not get any share of SAIL's loan to Iisco, it has to bearthe burden of the loan, the sources pointed out.

Ramnagar Colliery chief SK Jha said the situation will improve once the company gets returns from the two mines that have been contracted out. "The mines would start full-fledged production in next two three months and then the situation will improve," he said and added, "in that case there would be a surplus generation."

New underground projects are being contemplated for the colliery's healthy future. It has coal reserves of 250 million tonnes within an area of 3.5sqkm apart from another 150mt underground mine now under consideration.

According to a feasibility study, Rs 150-crore investment will be required for the 150mt underground mine.

Jha said, "The feasibility report has been submitted to Iisco and its board is yet to approve it. If the money is spent here, the project itself will generate additional fund for new projects."