Kolkata: The Union government has allotted the Deocha Pachami coal mine to the West Bengal Power Development Corporation Ltd (WBPDCL) after keeping it waiting for three years. Extraction from the coal block may, however, be a major challenge for the state-owned power utility.
Deocha Pachami is the world’s second-largest coal block, with an estimated reserve of 2.1 billion tonnes. The centre had planned to give it to multiple states for exploitation, but the plan did not take off.
West Bengal chief minister Mamata Banerjee on Friday announced with fanfare that the block had finally been allotted to the state.
Deocha Pachami has the potential to become the state’s biggest industrial project, but extraction of coal from the block is years away.
The allotment of the coal block to WBPDCL has paved the way for the power utility to start prospecting. However, this alone could take up to a year, officials of the company said on the condition of anonymity. The prospecting will help determine the technology to be used to mine coal and where the block mining is to be started. It will show how much coal can be extracted and if there are possibilities of recovering gases, they said.
The block is known to have a thick layer of overburden (an outer surface covering the coal seams), said Partha S. Bhattacharya, former chairman of Coal India Ltd (CIL), the state-owned monopoly miner.
CIL had access to the block earlier, but decided not to invest in it because of geological challenges. This would “surely require huge investments and perhaps also technology from outside India," he said.
Different technologies could be used to extract coal from the block, but as a rule of the thumb, open-cast mining would help start production at the earliest. Even so, it would take at least three years from the start of mining to reach the coal seams, said Bhattacharya. Long-wall underground mining, he added, would require more time and investment to start production.
To justify the capital costs of developing the mines, it should be able to produce 30-40 million tonnes of coal a year, he said. The state should budget for selling only about 5million tonnes for power production; the rest should be used in other ways such as production of ammonia or urea, he added.
WBPDCL officials cited before said the terms of the allotment are not clear yet. These will emerge as the centre and the state start a dialogue over the block. The state wants to align its payments for coal from the block with production, they said.
The state had already started discussions with various companies with mining technology. In April, Poland’s ambassador to India, Adam Burakowski, said Polish mining companies were, at the invitation of the West Bengal administration, “investigating opportunities" to partner local enterprises to extract coal from the Deocha Pachami block.