New Delhi: Anticipating a big push into nuclear power, private utilities such as Tata Power Co. Ltd and GMR Energy Ltd have initiated talks separately with state-run miner Uranium Corp. of India Ltd (UCIL) to start a joint venture (JV) to mine the fuel that runs atomic power plants.
“Tata Power and GMR Energy have entered into talks with UCIL to form partnership for uranium mining in India and overseas,” said a person aware of the development, but did not want to be named because negotiations are still under way.
Currently, atomic energy is the exclusive preserve of the Union government and uranium, the preferred nuclear fuel, can be mined only by UCIL. It is, however, expected that after India signed a civil nuclear pact with the US last year, the sector will be opened up. “An association with UCIL will help in identifying good prospects for mining,” the person said. “The proposed partnership will leverage UCIL’s expertise.”
UCIL chairman and managing director Ramendra Gupta and a GMR Group spokesperson declined comment. A Tata Power spokesperson did not respond to queries emailed by Mint on Wednesday.
Domestic power companies believe they would be able to source uranium competitively if they partner with firms such as UCIL. Both Tata Power and GMR Energy have shown interest in setting up nuclear power projects along with Jindal Steel and Power Ltd, JSW Group, NTPC Ltd, Vedanta Resources Plc and Reliance Power Ltd.
Out of India’s installed power generation capacity of nearly 150,000MW, nuclear energy accounts for only 4,120MW. According to audit and consulting firm KPMG’s India Energy Outlook report, the department of atomic energy hopes to build 250,000MW equivalent of nuclear power capacity by 2050 to meet the country’s long-term electricity requirements.
India’s uranium reserves are estimated to be some 78,000 tonnes—around 0.8% of global reserves—which can support around 10,000MW of generation. But delays in mining projects have led to demand-supply mismatch. India’s 17 nuclear reactors are operating at low capacity due to shortage of fuel.
“Uranium as a commodity has not been freely available and has much greater government and strategic involvement as compared to any other fuel,” said R. Rajaraman, professor emeritus (theoretical physics) at Delhi’s Jawaharlal Nehru University. “The real question is whether these firms will be guaranteed access to the fuel by the government of India.”