Coal India subsidiary Mahanadi Coalfields plans to boost production from its Basundhara reserves in Orissa to 85 million tonnes (mt) from 10 mt, according to a senior executive of the parent company.
The bulk of this output, however, will not be sold to consumers. It will be fed to a proposed 1,600-mw plant being set up near the mine in Sundergarh district. The power generated from the proposed plant will be fed to the grid, the Coal India executive said, refusing to be identified.
Transporting coal from Basundhara mines poses a challenge for the company because of inadequate railway link. Mahanadi Coal ields had been dragging its feet over the expansion plan because of such insufficient ransport facility.
MCL’s plan to set up the pit-head power plant hinges on the fact that the incremental production cannot be transported. It is planning to set up two 800-mw super critical units n a joint venture with a company specialis ng in power generation. MCL plans to offer majority stake in the power plant to the joint venture partner, which would preferably be an entity that would want to buy power from he plant. Of the power produced, Coal India will require 700-800 mw to run its mining equ pment. For the rest, it is in talks with various state governments. “The governments have shown interest in signing power purchase agreements with us,” affirmed the executive. According to recent reports, the Delhi government is in talks with MCL to buy some of the power from the proposed plant.
The Basundhara power project is Coal India’s first venture into electricity generation. If it succeeds, the company may take up other projects at locations where coal transport suffers a bottleneck.
Coal India had in 2008-09 first proposed setting up power plants near mines from where evacuation of coal was difficult. Senior executives said a power transmission line from the plant to the nearest electricity grid is easier and less costly to build. However, the project was stalled for several years till Coal India got approval from the board late last year.
Sources said the proposed project is expected to be completed by 2020.