Perth, Australia based mining company India Resources Limited announced that it has signed a letter of intent for 30 year contract worth AUD 500 million to develop and operate the Biharinath coal mine, located in the northeastern Indian state of West Bengal with Bankura DRI Mining Manufacturers Company Private Limited.

Under the letter of intent signed between IRL and Bankura, India Resources Limited will supply coal at a rate per tonne loaded on to Bankura's trucks.

An investment of around INR 100 crores has been earmarked for this venture. The reserves are estimated at 95 million tonnes.

As per the agreed plan, IRL is to deliver coal at a rate of 30,000 tonnes per year in the third year, ramping up to 480,000 tonnes per annum in the 7th year of operation. Bankura will advance IRL AUD 1.2 million to commence final design and initial mobilization work and IRL will have 6 months to establish funding for the infrastructure program.

Bankura is a special purpose vehicle set up by 6 sponge iron manufacturers of the Bankura and Burdwan districts to mine coal from the Anandapur Sector Biharinath block in the Raniganj coalfield in West Bengal.