State owned Odisha Mining Corporation (OMC) may get to operate a commercial coal block for supply of the dry fuel to non-regulated sectors like steel, cement and sponge iron.
The state government has already written to the Ministry of Coal to allocate the Patrapada coal block with reserve of 1042 million tonne to OMC. Patrapada is one of the 10 Schedule I coal blocks listed by the Ministry of Coal for non-regulated sectors. The remaining coal blocks identified are Nuagaon-Telisahi, Talabira II, Utkal, Biatarani West, Mandakini B, Rampia and dip side Rampia, Ramchandi promotional coal block and North of Arkhapal and Srirampur coal block.
“The discussions with the Coal minister were very positive. We hope to get one commercial coal block from the Centre in favour of our PSU”, said state minister for energy and IT Pranab Prakash Das.
The minister had recently written to Coal minister Piyush Goyal, seeking allocation of Patrapada coal block in favour of OMC.
Earlier, chief secretary G C Pati had written to Coal secretary, pressing for allocation of Patrapada coal block to OMC.
The state government argued that allocation of a commercial coal block to OMC woud facilitate sale of coal to non-regulated sectors.
Till now, only one coal block- Jamkahni with 80 million tonne of coal reserve has been earmarked for non-regulated sector (sponge iron). The Coal ministry has already put nine coal blocks for auctions for the power sector- Utkal-C, Bijahan, Talabira-I, Mandakini, Utkal B1, Utkal B2, Radhikapur (East), Radhikapur (West) and Utkal D.
Due to reverse bidding system followed for power sector end use, the state government has been deprived of substantial revenue from the coal blocks auctioned for power sector as compared to those for the non-regulated sectors.
There are 56 captive power plants (CPPs) of iron and steel and aluminium industries in the state with installed capacity of more than 6310 Mw . Besides, the annual requirement of coal for sponge iron units alone excluding the CPPs is estimated to be at least 30 million tonne per annum. The coal requirement of these end use industries is only expected to increase in the coming years with their expansion and commencement of production by more units.
Only one small coal block- Jamkhani (with 80 million tonne geological reserve) has been earmarked for the non-regulated sector which seems grossly inadequate for the requirement of sponge iron units and CPPs of steel and aluminium industries.
In the absence of adequate allocation of coal blocks for the unregulated sector, these units have to depend on other states for their requirement, resulting in wasteful, criss-cross movement over long distances besides affecting their economic viability. It would also deprive the state of its due share in revenue generated from auction of coal blocks.