Jharia, Raniganj mines to be expanded

Kolkata: Public sector coal major Coal India Limited(CIL) has lined up a massive investment plan of Rs 14,000 crore to scale up production of coking as well as non-coking coal in its Jharia and Raniganj coalfields.

'CIL will invest Rs 9,000 crore for the Jharia coalfields, the storehouse of coking coal and the balance Rs 5,000 crore on Raniganj. The funds will be raised through cess to be levied on the sale of coal and also through Centre's grants', N C Jha, director(technical) of CIL said here on the occasion of Global Steel meet in the city.

Jha said that CIL has evolved a master plan for rehabilitation and resettlement for families to be displaced from the Jharia and the Raniganj coalfields and currently, the plan has reached the Cabinet Committee on Economic Affairs (CCEA) for approval.

Jha pointed out that constraints of space in these two coalfields, both of which were densely populated areas, was acting as a roadblock for enhanced productivity.

CIL plans to raise its overall mining area in the Jharia coalfields to 430 square km and feels this can be achieved through the displacement of population.

The coal major has also approved the tender document for setting up washeries for all varieties of coal on a BOOT (build, operate, own and transfer) basis.

At present, only 15 per cent of the total coal produced by CIL is washed and washing alone can scale up the production of coking coal by 3.5 million ton (mnt) per annum, Jha alleged.

He admitted that the out of the 32mnt of coking coal produced by CIL in 2006-07, only 17mnt was suitable for metallurgical purposes, due to the high ash content. Jha also stressed on the need to enhance domestic production of coking coal to meet the requirements of the steel sector.

Following the new coal distribution policy approved by the Centre, CIL can now import coal to meet the domestic requirements.

'The overall coal demand in the country is set to touch 683mnt by 2011-12 and CIL which produced 361mnt of coal in 2006-07 has targeted a production of 520mnt, thereby creating a deficit of 163mnt, which has to be met through imports', he said.

Jha said expansion of port capacities and expansion of rail links to handle import and transfer of additional coal were urgently needed.

In a parallel move, Northern Coalfields Limited(NCL), a subsidiary of CIL, and Neyveli Lignite Corporation Limited aimed to sign an MoU by the year-end for setting up a 1000 MW power plant in Madhya Pradesh.

'The draft MoU has been approved by the board of directors of NCL and Neyveli Lignite and the power plant is likely to be set up somewhere near the Himsagar Dam in Madhya Pradesh. Coal for the power plant will be sourced from Neyveli Lignite's Nigahi coal block-B', Jha told Business Standard.

Both NCL and Neyveli Lignite will set up a JV company for setting up the power plant at an investment of over Rs 5,500 crore. The JV company would be responsible for land acquisition for the power project, Jha added.

CIL had announced that it would foray into power generation and two of its subsidiaries, NCL and Mahanadi Coalfields Limited (MCL), would set up 1000MW power plants through JVs with Neyveli Lignite.

The public sector coal major has already taken up the issue with the Union coal ministry as it needs the ministry's approval for going ahead with the two power plants, whose combined investment exceeds Rs 11,000 crore.

MCL initiated talks with Neyveli Lignite for the JV company but was yet to come up with a draft MoU so far.