North Eastern Coalfields Ltd (NECL), an arm of Coal India Ltd, will start two opencast mines in Assam to boost its production by over 27% to 1.4 million by the end of 2009, with a total investment of over Rs 100 crore Currently NECL produces about 1.1 million tonne of coal a year and the two new mines are expected to generate 3 lakh tonne of coal. Sources close to the deal said, officials from the Assam Government have been apprised of the draft plan for the mines and the proposal now awaits environmental clearance. However, opposition to open-cast mining is quite old in the area. NECL took over the mines in 1973 from the UK-based Assam Railways and Trading Company. In 1985, it switched from underground mining to open-cast mining to offset the high cost of production involved in underground mining. A similar move by NECL to set up two opencast mines in 2005 had been caught up in litigation and opposition from the environmental groups. This time around, the source said, both the state government and NECL are keen to see the plan to materialise without being caught in litigation. The Environmental Impact Assessment report addressing all stakeholders' views has been sent to the Environmental Appraisal Committee for Coal and Lignite, attached to the Coal Ministry. "We expect all formalities to be completed by the end of this fiscal as necessary environmental approval and nod from Public Investment Board (PIB) is needed for a project of this sort', the source said. NECL is keen to see early implementation of the project as it aims to minimise its operating losses. The operating cost for an underground mine is Rs 3,000 per tonne while it receives only Rs 1,800 per tonne from sales, thereby incurring a loss of Rs 1,200 per tonne. NECL makes up for this loss by its production from the opencast mines, where the cost of production is significantly lower than its sales price. For Assam Government, the project is vital to meet its power generation needs. Assam continues to be one of the states with the lowest power generation and most of its coal fired power plants suffer from the lack of availability of coal.