"We are going to open a new underground mine at Muraidih near Dhanbad in (Jharkhand) which is likely to begin production within three years," a source in Coal India requesting anonymity told PTI.
"The tender was finalised a month back," the source added.
The tender for the development and subsequent production from the underground mine was floated by Bharat Coking Coal Ltd (BCCL), a wholly-owned subsidiary of Coal India Limited (CIL).
The mine is estimated to have an annual production capacity of two million tonnes.
"Out of the five parties that had applied for the tender, three were qualified," the source said, adding,
"A Chinese firm CME and an Indian firm emerged as L1 bidder", the source said.
Coal India is also planning to extract coal from its abandoned mines and will float tenders for 18 such mines.
The 18-abandoned underground mines are owned by three of its subsidiaries in partnership with private players.
Underground mining would be revived in six abandoned mines of Eastern Coalfields, eight of BCCL, and four belonging to Central Coalfields.
Last fiscal, Coal India received expression of interests from 12 parties for a 50:50 joint venture for re-opening of 18 abandoned mines under eight subsidiaries.
Among the parties in the fray were global majors such as ArcelorMittal, Rio Tinto and Titan Mining (Australia).
This apart, Reliance Natural Resources, Sterlite, JSW Steel, Monnet Ispat, Essar Steel, a joint venture of SAIL and Tata group, and Andhra Pradesh-based GVK Power had also submitted EoIs.