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MCL lines up Rs 20,000 crore investments for power, coal, infra development

Dillip Satapathy / Bhubaneswar 30 Nov 16 | 07:50 AM

Mahanadi Coalfields Ltd (MCL), the largest coal producing subsidiary under Coal India (CIL) umbrella has lined up Rs 20,000 crore investment over next four years to bolster its business activities that include coal mining and evacuation, infrastructure strengthening and foray into power generation.

In contrast to these ambitious growth plans, the company, however, has immediate concerns over not meeting its production target in the current fiscal due to hurdles over land acquisition and delay in getting statutory clearances.

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MCL had produced 137.8 million tonne coal in 2015-16 dislodging South Eastern Coalfields Ltd (SECL) as the largest coal producing subsidiary under CIL. This has earned the company the highest target of 167 million tonne coal production among all CIL subsidiaries in the current fiscal. Till date, it has produced 85.3 million tonne and despatched 92 million tonne coal.

"As the things stand now, we may fall short of the production target by the end of the fiscal", said a top official of the company citing problems in land acquisition and evacuation and delay in getting statutory clearance such as forest and environment approvals as the main road blocks in this regard.

MCL has its mines across four districts in Odisha-Sundergarh, Jharsuguda, Sambalpur and Angul with the Talcher coalfields in the last one being most problematic from operational point of view.

"There is frequent disruption in mining and evacuation activities in Talcher area due to agitation by the locals over land acquisition and jobs demand", said AK Jha, chairman and managing director of MCL.

Out of the total target of 167 million tonne, Talcher coalfield had lion's share of 105 million tonne. But the actual production may not cross 35 million tonne pulling down the overall performance. "If the operations remain hassle free during the next four months, we may produce 145 million tonne coal by the end of the year", he added.

The company has suffered output loss of 15 million tonne due to delay in forest and environment clearances, particularly with respect to two mines Garjanbahal in Sundergarh, a new area and Anant colliery, an existing mine.

Despite these hiccups, MCL has lined up massive capital investment as part of its long term growth plan. The biggest of these investments will be in the foray into power generation where MCL proposes to join hand with another public sector company, Neyveli Lignite Corporation (NLC) for setting up of a 2x800 MW power plant in Sundergarh district at a cost of Rs 12,000 crore.

In a bid to remove coal evacuation bottlenecks, the company is in the process of laying 53 km long rail network connecting Jharsuguda with Sardega at a cost of Rs 2000 crore. The line will be commissioned in June, next year. The work on another rail line, the 14 km long Angul-Jharpada link, is expected to start soon at a cost of about Rs 1000 crore.

MCL intends to set up two coal washeries each in Talcher and Ib Valley costing Rs 1400 crore and coal handling plant with an investment of Rs 600 crore. Similarly, it has set aside Rs 500 crore for development of road network.

In addition, there will be substantial investment for opening of Siarmal mines in Basundhara sector, which is expected to produce 40 million tonne of coal in next 4 years.

Coal India has set a target of producing 1 billion tonne of coal by 2020 and MCL will a major role in achieving this target with a share of 250 million tonne, Jha said.

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