KOLKATA (miningweekly.com) – India’s Singareni Collieries Company Limited’s (SCCL’s) bid to expand its mining footprint beyond the southern region received a boost with news from the Coal Ministry that it may be allocated a new coal block in Odisha in the east.
Sources say that the miner has received “unofficial verbal communication” that the New Patrapara coal block will be allocated to SCCL, staving off strong competition from an Odisha government agency also seeking allocation of the same asset.
Once formalised, the allocation of the New Patrapara block will be SCCL’s second coal mining operation, having already been allocated the Naini block, also in Odisha, and it marks the miner’s maiden foray outside its operational hinterland in the southern state of Telangana, where it is headquartered.
The Coal Ministry favoured allocation of the New Patrapara block to SCCL as it was in close proximity to its Naini coal mining operations and this tilted the scales in its favour compared with bids from the Odisha government agency.
The Odisha government has made a strong case with the Coal Ministry for the allocation of the coal block to be linked with thermal power plants operated by the state government.
However, the formal transfer of the New Patrapara block is expected to face a few glitches. The coal block had earlier been allocated for development to eight private miners. However, in 2014 the Supreme Court cancelled preferential allotment of several coal blocks by the Coal Ministry, which included New Patrapara.
The issue now that will be faced by the Coal Ministry is whether, and how, to compensate the erstwhile private miners for the investment already made by them prior to 2014, the sources said. It is not clear whether the liability for compensating the investments already made by the erstwhile licensees will be transferred to SCCL or will be borne by the federal government.
Be that as it may, the second Odisha block will be significant for SCCL in expanding its mining asset portfolio beyond the southern state of Odisha, and as has been reported earlier by Mining Weekly Online, SCCL has already firmed up a capital expenditure (capex) of $1.40-billion over the next five years to secure coal blocks across the country.
The capex is aimed at securing at least seven coal blocks in other states and ramping up its total coal production to 85-million tons a year by 2023, up from 62-million tons a year at present.