Australian miner Rio Tinto Ltd. (RIO.AU) is among 17 local and foreign companies looking at projects to develop underground coal mines in India, a person with direct knowledge of the matter said Monday.

India's largest coal producer, state-run Coal India Ltd., in April invited global expressions of interest to develop underground mines at seven of its coal mining blocks in the country.

Coal India, or CIL, has been struggling to raise production from its underground mines due to a lack of technology and expertise, and it's now seeking private participation from local and global firms.

Apart from Rio Tinto, other foreign firms that have shown interest in the projects are Australia's Walter Mining, the U.K.'s Anglo American Plc and the Zhengzhou Coal Mine Machinery Group, the person said on condition of anonymity.

From the 17 companies Coal India will now choose those eligible to take part in a tender process to award the contracts, the person said.

"The process will take time, but it's expected to be completed it by the end of this year," he said.

Some of the Indian companies vying for the mining projects include Essel Mining, Essar Mineral Resources and Reliance Infrastructure Ltd. , the person said.

CIL has been searching for technology partners from China, the U.K. and Australia to raise the output from its underground mines.

The company plans to increase its output to 520 million tons by the year ending March 31, 2012, and it needs to develop its underground mines to meet that target.

During the last fiscal year ended March 31, about 361 million tons of coal was produced from all of CIL's mines, and 43 million tons of this was from underground mines.

India depends heavily on coal to run its power plants. Coal-fired thermal units account for 62% of total power generation in India.

Coal will continue to dominate the energy mix in India, the International Energy Agency said in its annual World Energy Outlook last November.

India expects to add about 78,000 megawatts of generating capacity during the five years starting in 2007, and this new capacity will continue to underpin coal demand.

Power plants already consume almost 80% of the coal produced in the country.