NTPC says ‘private group’ illegally mining its coal block

New Delhi: State-owned thermal power producer NTPC Ltd hasn’t been able to start mining captive coal blocks allotted to it, but coal is being illegally extracted and sold by outsiders from its $5.5 billion Pakri-Barwadih block in the eastern state of Jharkhand.

NTPC, India’s single largest coal consumer, has now alerted the Union government that a “private group” is carrying out the illegal mining and requested the district commissioner of Hazaribagh, in which the block is located, to take action to stop it.

Mint couldn’t ascertain the identity of the group that’s mining the Pakri-Barwadih coal block, which has exploitable reserves of 503.39 million tonnes (mt) and is one of six captive coal fields allotted to NTPC.

Delays in securing mandatory clearances have stalled mining of the blocks by NTPC, which plans to meet about 20% of its coal requirements from captive mines by 2017.

Many of India’s coal mines are located in remote forest areas. Criminal gangs active in these parts extract coal illegally and also steal the mined fuel from government warehouses.

In a 25 November letter to the power ministry, a copy of which has been reviewed by Mint, NTPC wrote: “The attempt to sabotage this project by some people of vested interest is not unknown. But recently there is an attempt to indulge in illegal activity i.e. mining privately by this group in Pakri-Barwadih coal block.”

NTPC had earlier planned to start mining from the block awarded in October 2004 by end-2007. The utility has already spent ₹ 1,082 crore on the project, which has been awarded to Australia’s Thiess Pty Ltd to develop and operate.

“Men and machinery are idling in Pakri-Barwadih coal block for almost 2 years at the pit-head and mining can be started immediately,” NTPC wrote.

NTPC requires 166.7mt of coal in the current fiscal to operate its power projects. Of this, while 150mt is to be supplied by state-owned Coal India Ltd (CIL) and Singareni Collieries Co. Ltd, the balance 16.7mt is to be sourced from overseas.

“The issue has been taken up at various levels both in the central government and in the state government of Jharkhand. We are ready to start mining if we are allowed to,” said a senior NTPC executive, who requested anonymity.

The utility has the capacity to generate 42,454 megawatts (MW) of electricity with 17 coal-fuelled projects. The demand for coal will increase with the utility setting a target of becoming a 128,000MW power producer by the year 2032. Of this, 56% or 71,680MW will be coal-based.

“While we need coal for our projects, illegal mining is happening at Pakri-Barwadih block,” said another NTPC executive, who also didn’t want to be identified.

Demand for the fuel in the country is expected to grow from 649mt per year now to 730mt in 2016-17. Of India’s current capacity of 232,000MW, around 58.6%, is fuelled by coal. NTPC has 18.29% share of India’s installed power generation capacity.

“There are problems that have been created for the block. We are evaluating the situation,” a power ministry official said on condition of anonymity.

An NTPC spokesperson said in an emailed response to queries from Mint that NTPC had brought the issue to the notice of the Jharkhand state government at several meetings. The utility’s chairman and managing director (Arup Roy Choudhury) briefed Jharkhand chief minister (Hemant Soren) about the matter at a meeting on 22 November, the spokesperson said.

“NTPC, vide letter dated 25.11.13, appraised DC (district commissioner), Hazaribagh that such extraction of the coal from sub-surface is illegal and has violated the existing statutes governing the coal mining and requested to restrict such mining activity which is against the law of land,” the spokesperson added.

Besides the Pakri-Barwadih coal block, NTPC has secured five other mines: Chatti-Bariatu (Jharkhand, 151.8mt), Chatti-Bariatu South (Jharkhand, 242.28mt), Kerandari (Jharkhand, 142.01mt), Dulanga (Odisha, 152.00mt) and Talaipalli (Chhattisgarh, 843.69mt).

Experts are aware of the problems facing NTPC in exploiting the mines.

A Chennai-based power sector expert, who didn’t want to be identified because of commercial considerations, said: “Most of the delays (in starting mining) took place due to clearance-related issues. Their mining plan was good but it never materialized. Since, these are law and order issues, NTPC is at the mercy of the state government.”