KOLKATA (miningweekly.com) – Having secured three coal blocks through the preferential allocation dispensation for government companies, NLC Limited (formerly Neyveli Lignite Corporation) has abandoned plans for overseas acquisition of coal assets.
NLC has been allocated two coal blocks in the eastern Indian province of Odisha and one in Madhya Pradesh, in central India, which a company official has said will be “sufficient” to meet the demand for feed of the company’s future thermal power plants and for merchant sales to other power utilities.
In the last two financial years, NLC has created a corpus to acquire high-grade coal assets overseas to feed new and expanded thermal power capacities under its fold. The company previously expressed an interest in coal assets in Australia, Indonesia and Mozambique.
NCL’s focus is on acquiring coal of high calorific value to feed its power projects, as its existing domestic production of lignite is of low grade and not suitable to achieve optimal efficiencies from power plants.
The coal miner cum power generator plans to increase it thermal power generation capacity four times to 11 200 MW by 2020.
The change of name from Neyveli Lignite Corporation to NCL also reflects the miner’s changing identity from a pure lignite mining company to a more diversified business portfolio ranging from coal mining to thermal power generation to renewable energy, the official added.
Besides bagging new coal blocks from the government, NLC has also appointed consultants to assist in identifying and acquiring stressed power generation assets with captive coal blocks to achieve inorganic growth. Two such thermal power projects with captive coal mines – one in Madhya Pradesh and the other in Odisha – are already on the radar, with the consultants carrying out due diligence.
Given these projects and opportunities opening up in the domestic market, NLC is not under any compulsion to look at overseas assets anymore, the official said, noting that greenfield projects abroad came with their own challenges.