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Q&A: VS Gadhavi, MD, GMDC Ltd

Rutam Vora / Mumbai/ Ahmedabad 21 Nov 11 | 12:09 AM

Coal supplies from domestic sources are not enough to meet the consumption requirements. With more and more power generation capacities coming up on stream, miners like Gujarat government-promoted Gujarat Mineral Development Corporation Ltd (GMDC) has to look at cross boarder geographies to ensure uninterrupted coal supplies to the domestic clients, says VS Gadhavi, managing director of the company during an interaction with Rutam Vora. Edited Excerpts:

What is your take on coal prices and coal shortage in India?
In the current market condition, there is an increase in the overall fuel cost. This may hurt bigger industries and their supplies might get affected. The coal demand is huge for range of industries, but local availability is scarce. This causes high dependency on imported coal, prices of which is subject to international economic fluctuations. However, lignite prices may show some stability with short-term fluctuations. At GMDC we make every effort to ensure save our consumers from price hike. So far, we have been successful in doing so.

Looking at the current market situation and rising coal demand for power generation, are you looking to increase mining activity?
In the year 2010-11 we mined 10.23 million tonnes of lignite from our five coal fields in Gujarat. The availability of coal will improve further once we get an approval from the ministry of environment and forests (MoEF) to increase mining at Mata-No-Madh and Bhavnagar coal mines. The demand for coal is huge and we have to look for every possibility to cater to this demand.

We are already in tie-up with the Pondicherry Industrial Promotion and Development Corporation (PIPDC) to mine the entire Naini coal block in Orissa. The field survey will start soon. Further, we are also planning to bid for the coal fields in Jharkhand. This field is expected to have about 200-300 million tonnes of coal reserves. Most of our coal supplies will go to state power utilities for power generation purpose.

Besides domestic coal sources, are you also considering expanding your operations to overseas geographies?
Our domestic coal resources are in short supply, hence we have to look beyond Indian geography. Yes, we are exploring possibility for acquiring coal mines in Canada. The aspects such as economic viability of mining and transportation of mined coal from there to India are being worked out. Our representative has visited the country recently and we should be able to take a final call on the decision over the next 3-4 months time. We had also made an attempt for coal mining in Uganda, but could not succeed there.

You have been in talks with some of the private players for alumina refinery in Gujarat. Any progress on that front?
So far technical evaluations of the project is over and we have invited financial bids from the parties. Some of the prominent players including Nalco have shown interest for the project. By December 31, 2011, we expect to finalise partner for the project.

How this alumina project would benefit GMDC?
We are aiming for an alumina plant with aluminum smelter at Kutch based on non-plant grade bauxite, which will be supplied by GMDC. The project would involve an investment of about Rs 10,000 crore. But the most important aspect is that this project would create about 10-12 times value addition to bauxite, which is abundantly available in this region. During 2010-11, we produced 95,000 tonnes of high grade bauxite, 453,110 tonnes of law grade and 135,000 tonnes of mine dust.

Please share some details about GMDC's investment plans for renewable energy?
We are setting up 100 megawatt (Mw) wind farm with an investment of Rs 700 crore and expect it to be commissioned by December 2011. Also, on the solar power front, we are setting up 5 Mw solar power plant with an investment of Rs 100 crore and will be commissioned before December. Further, we have laid out plans for additional 50 Mw wind power generation capacities in Gujarat with an estimated investment of Rs 350 crore.

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