ENERGY

Coal India, Reliance power looking to offset India's coal supply issues

India may be struggling with coal supply issues, but Coal India has chalked out a $10bn capex programme, while Reliance Power has begun production of coal at its Madhya Pradesh mine.

Author: Shivom Seth
Posted: Monday , 03 Sep 2012

MUMBAI (MINEWEB)  - 

Though scarcity of coal is one of the biggest challenges facing the power sector in India, production of coal has begun at Reliance Power's mines at Sasan, in Madhya Pradesh, while Coal India has announced it is scouting for overseas acquisitions.

State-owned miner, Coal India, has chalked out a massive $10 billion (Rs 594 billion) capex programme for the current five year plan period ending March 2017. This includes $4.5 billion (Rs 250 billion) for overseas acquisitions.

The company has two coal blocks in Mozambique with estimated reserves of about one billion tonnes. Minister of State for coal Prakashbabu Patil said in the Rajya Sabha today that the company has set aside $1.8 billion (Rs 100 billion) for the development of coal blocks in Mozambique.

Patil said that as per the approved budget estimates for the Annual Plan 2012-13, capital investment of Coal India is $769 million (Rs 42 billion) for achieving a coal production target of 464.10 million tonnes and dispatch target of 470 million tonnes.

``In addition, a budget provision of $900 million (Rs 50 billion) has been made for the acquisition of assets abroad,'' he said.

In the case of Reliance Power, production of coal has begun at its plant in Madhya Pradesh. Coal from the mines will be used to generate electricity at the company's Sasan Ultra Mega Power Plant, India's largest domestic coal-based power plant.

The company has the largest captive coal reserves in the private sector, estimated at two billion tonnes. The company is developing three coal mines in Indonesia and is also developing coal-bed methane based generation capacity.

With global partners like North American Coal Corporation, Caterpillar, Komatsu and Atlas Copco among others, the company is set to ensure annual production of 20 million tonnes from the Moher and Moher-Amlohri coal mines associated with the Sasan project. This makes Reliance Power's mines the largest in the country on the basis of volume of material handled, the company said.

Chief executive officer of Reliance Power, J P Chalasani said the investment in the coal mines would be around $900 million (Rs 50 billion) which included investment in state-of-the-art mining equipment and technology.
He added that the company would be able to get 20 million tonnes per annum from the mines. The Sasan coal mines are deploying the largest mining equipment ever used in India.