Adani to invest Rs10k cr in coal mine development, power plant in Orissa

Adani to invest Rs10k cr in coal mine development, power plant in Orissa

Ahmedabad: Adani Enterprises Ltd (AEL), the flagship firm of Ahmedabad-based Adani Group, which has been selected as mine developer and operator (MDO) for development and operation of the Chendipada coal block in Orissa by UCM Coal Company Ltd, plans to invest Rs10,000-11,000 crore in a 2,000 MW pit-head power project and for the development and operation of the block. This also includes the setting up of a coal washery.

The block has a mining capacity of 40 million tonnes per annum (MTPA).

The coal ministry had allotted the Chendipada coal block in Talcher coalfield, Orissa, with reserves of about 1,600 million tonnes jointly to Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL), Chhattisgarh Mineral Development Corporation Ltd (CMDC) and Maharashtra State Power Generation Company Ltd (Mahagenco) for the captive mining of coal.

The three formed the joint venture company UCM for the development and mining of the Chendipada coal block, the company said in a statement.

The 11-12 million coal rejects from the washery will be used to fire the 2,000 MW power plant.

“This project will help us accomplish our target for 2020. We aim to implement 20,000MW of power generation, 200 million tonnes of mining contracts, besides scaling up our cargo handling capacity to 200 million tones per annum, all of which we aim to achieve by 2020," said Gautam Adani, chairman of Adani Enterprise Ltd.

Adani will hold an 89% stake and UCM 11% in the yet to be named power company.

Under the contract, Adani will develop and operate the coal block. This will include land acquisition, roads and rail links, preparation of mine plans, approvals and clearances, coal mining, setting up of the coal washery, establishing railway sidings and delivering washed coal to end users at the designated power stations in UP, Chhattisgarh and Maharashtra.

In the recent past, the Adani group won competitive bidding tenders as MDO for total mining capacity of 70 MTPA of Mahaguj Collieries Ltd., Rajasthan Rajya Vidyut Utpadan Nigam Ltd. and Chhattisgarh State Power Generation Co Ltd. for various coal blocks in Orissa and Chhattisgarh state. With this, Adani has total a 110 MTPA of coal mining contracts in India, which makes it one of the largest mining companies in the Indian private sector.

The coal production will commence within 42-48 months from these mines.

In August, AEL, announced the acquisition of the Galilee Basin coal mine in Queensland, Australia, for about Rs12,600 crore in a cash and royalty deal. As part of the buyout deal, the group had paid Rs2,100 crore in cash and is to make an additional payment of about Rs10,500 crore over the next 20-year in royalties to Linc on the estimated 7.8 billion tonnes of coal reserves. In October, AEL announced the investment of $6.9 billion in developing this coal mine. The company is targeting the first coal from this by the end of 2014 and total production to reach 50-60 MMTPA by 2022.

On the power front, Adani has already commissioned 990 MW at Mundra and plans to add another 330 MW by mid-November, the trial run for which is currently on.

Apart from the Chendipara power project, Adani has already lined up 16,500 MW of coal-based power projects at various locations in Gujarat including Mundra (4620 MW), Bhadreshwar (3300) and Dahej (2640 MW). The company is also in the process of implementing power projects in other states including Tiroda (3300 MW) in Maharasthra, Kawai in Rajasthan (1320 MW) and Chhindwada in Madhya Pradesh (1320 MW). The company also has approvals in places for setting up a 2,000 MW gas fired power project.