Coal Min to play fair in NTPC-NLC tussle for coal blocks

NLC’s request would be considered along with other companies at the time of bidding for blocks.

In the tussle for coal blocks between power generator NTPC Ltd and Lignite miner Neyveli Lignite Corporation (NLC), the coal ministry has decided to play fair. It will entertain its public sector undertaking NLC's request for the allocation of blocks that earlier belonged to NTPC, only along with other companies during the bidding rounds that are due soon.

The ministry had cancelled the allocation of five of the eight NTPC blocks earlier this year, alleging undue delays in their development. The power ministry had later intervened by requesting its coal sector counterpart to review its decision. While negotiations between the two ministries are still on, NLC has sought the allocation of three of the five blocks—Chatti Bariatu, Chatti Bariatu (South) and Kerandari.

A senior coal ministry official told Business Standard there was no provision for allocating the blocks to NLC on a nomination basis. “There is a proper procedure that will be followed for allocation. NLC's request would be considered along with other companies at the time of bidding for blocks,” he said.

The three blocks sought by NLC for power generation are located in Jharkhand and have combined reserves of over 800 million tonne (Mt). NLC's contentious demands, if met, would mark Lignite miner's foray into coal mining and coal-based power generation. It would also dent NTPC's long-term fuel securing strategy.

NLC has a current lignite-based power generation capacity of 2,700 Mw and it plans to add another 5,000 Mw by setting up two coal-based plants of 2,000 Mw capacity each in Uttar Pradesh and Tamilnadu, and another 1,000 Mw plant in Tamilnadu. NLC's proposed plants would require around 20 Mt of coal annually.

An e-mail sent to NLC Chairman A R Ansari for comments remained unanswered.

NTPC is, however, hopeful of getting back the lost blocks. “NTPC is working full swing on these blocks on land acquisition, forest and environment clearance and we do not think our blocks would be taken,” said a senior company official.

The Maharatna enterprise currently consumes around 150 Mt of coal to operate 36,000 Mw capacity annually. Its coal requirement is set to grow to 250 Mt by 2017, around 20 per cent of which would be met through captive coal production.