New Delhi: Four players, including US-based Washington Group and Singareni Coillieries Ltd, are taking a tilt at acquiring the rights to develop the first of the captive coal blocks owned by NTPC Ltd, the largest power generation company in the country.
The operator for the first block, Pakhri Barwadih in Jharkhand, with gross reserves of 1,350 million tonnes will be selected by March 2007, through competitive bidding. NTPC expects production in Pakhri Barwadih to begin by December 2007.
NTPC does not have any expertise in coal mining, and is looking for participation from the coal mining sector to develop the captive coal blocks allotted to it by the ministry.
“Developing our own coal blocks will help us in cost savings to the tune of 15% to 20%,” a company executive said. The operator will be selected through a process of competitive bidding. Out of the gross reserves, the power major believes that 70% is mineable.
The company is also waiting for the coal ministry notification for land acquisition and forest clearance for the Pakhri Barwadih block. “We are awaiting forest clearance as the coal evacuation corridor lies in the forest area,” the executive said.
Coal accounts for over 50% of India’s commercial energy consumption, and around 78% of domestic coal production is dedicated to power generation.
NTPC has a total coal requirement of 100 million tonnes per annum (MTPA) out of which around 4 MTPA is imported.
The rest of the coal requirements are met through the coal supplies by Coal India Ltd, parent company of Singareni Collieries.
NTPC plans to invest about Rs10,000 crore to produce 50 million tonnes of coal annually by 2013. Coal is critical for the company, as over 80% of its installed capacity of 26,194 megawatt is coal-based.
The government has allocated eight captive coal blocks to NTPC. The other blocks given to the company are Kerandari (228 mt), Chatti Bariatu (243 mt), Chattrasal (150 mt), Dulanga (260mt), Talaipalli (965 mt), Brahmini (1,900 mt) and Chichro Patsimal (356 mt).