Singareni to invest Rs 846 cr in Adriyala project

State-owned Singareni Collieries Company Limited (SCCL) has secured the Union Cabinet committee on infrastructure’s approval to take up its Adriyala coal mine project at Godavarikhani in Karimnagar district of Andhra Pradesh with an outlay of Rs 846.06 crore, according to SCCL chairman and managing director S Narsing Rao.

The 2.81-million tonne per year capacity underground shaft (Longwall) project will be funded through internal accruals of Rs 632.85 crore and the remaining through debt, Rao told mediapersons here on Saturday.

Estimated to have 54.36 million tonne of deep-seated extractable coal reserves in five horizons. the Adriyala project will employ 850 to 1,000 skilled labour. SCCL will use the Longwall shaft technology (mining with hydraulic-supported machines) to flush out the coal. The company has engaged CSIRO, an Australian government research organisation, to investigate and advise on the technical specifications of the equipment to be used.

“SCCL has already started punch entries (entry from the surface) at the project site and production will begin from September 201. With a projected output of 14.92 tonne per manshift, the cost of production at full performance will be Rs 863 per tonne to give an internal rate of return of 17.3 per cent,” Rao said.

The Rs 846.06-crore outlay for the Adriyala project is the highest by SCCL so far. The company has invested Rs 807.85 crore in the two million tonne-capacity Ramagundam Opencast-II project, which it undertook in September 1994.

The Adriyala project, which has obtained environmental clearances from the ministry of environment and forest, would ensure sustained coal supplies to NTPC’s Ramagundam unit. SCCL has another seven mines in the pipeline and would be sealed in four years, Rao said, adding that the company, while not retrenching any employee would go for mechanisation for greater productivity.

SCCL is expecting to end the current financial year with a 12 per cent growth to touch 50.4 million tonne coal production. It produced 33.74 million tonne as on date, 10 per cent more than the set target of 30.5 million tonne. It expects revenues to be Rs 7,000 crore, as compared with Rs 6,400 crore last fiscal.

On the 600-Mw merchant power plant that SCCL had proposed in Adilabad, Rao said the company was working on procuring equipment for the project. It would shortly achieve financial closure for the project with Rs 900 crore from internal resources and Rs 1,900 crore from financial institutions.