Kamarajar Port Ltd (KPL) has given permission to Sical Iron Ore Terminal (SIOT) to undertake modifications of its existing iron ore terminal to allow it to handle coal.

The original terminal development contract was signed in September 2006 between KPL and SIOT, in what was a 30-year BOT concession, as part of a $71.767 million project. The plan called for a two phase development, each of which would involve providing capacity of 6 million tonnes per annum.

Although phase 1 was built at a cost of $53.82 million – involving a revenue share of 51.6% - the terminal was never commissioned due to a ban on iron ore exports being introduced by the Supreme Court and the Karnataka state government.

Given its inability to handle iron ore, KPL has sought to turn its facilities into a common user coal handling terminal. This involved an open tender in which three parties bid, with the eventual contract being awarded to SIOT, whose proposal involved a revenue share of 52.524%. The concession agreement was signed on 11 July.

Conversion work on the terminal is due now to commence in October and is slated for completion within 12 months.