NTPC is not looking at acquiring overseas coal mines, and instead, it will focus

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on exploiting captive mines allocated to it to meet fuel demand, company chairman Arup Roy Choudhury said in an interview with Financial Chronicle.

“By 2017, I see one-third of the coal coming from our own mines. It is always good to do own coal linkage. We (India) have fifth largest coal bearings in the world. We have 106 billion tonne of established reserves. We are not even mining one billion a year,” Choudhury said.

Undisrupted coal linkage to its thermal units is vital for NTPC to achieve the 12th five-year plan target of 66,000 mw by March 31, 2017. This is slightly less than double the present installed capacity of 36,014 mw. Earlier, NTPC was eyeing acquisition of coal blocks abroad, including Africa. It was also a part of the International Coal Ventures (ICVL), which was formed to acquire coal assets overseas in 2009. In 2011, NTPC opted put of ICVL. The PSU power producer has been allocated three captive mines in Jharkhand. Out of these, NTPC will mine coal from Pakri Barwadih starting 2012-13. The mine near Hazaribagh in Jharkhand can produce 15 million tonne (mt) of coal per annum.

“We took seven years to come to this stage (to start production from Pakri Barwadih). Traditionally, Indian miners take double that time to start output from a coal mine,” Choudhury said. At the same time, tenders have been floated for the Chatti Bariatu mine, which is expected to produce 7 million tonne a year. The third mine, Kerandari, is estimated to produce 6 million tonne per annum. “The choice of having domestic coal linkage or using imported coal primarily depends on the availability and location of its plant. If the unit is situated in a coal bearing state such as Chhattisgarh or Jharkhand or in their neighbourhood, the transportation cost would be less,” said Hyderabad-based Dipesh Dipu, director at Deloitte Touche Tohmatsu India Private. At present, NTPC buys 140 mt coal from Coal India out of its total demand of 160 mt. The remaining demand is met with imports. The demand would go up to 200 mt by end of the 12th plan. “It makes no sense (to acquire coal blocks overseas). Either the cost is too much or uncertainties are many. Imported coal is two-and-a-half times expensive (compared with domestic coal),” Choudhury said.