Neyveli Lignite seeks coal blocks that NTPC lost

Neyveli Lignite has asked the government to allocate three coal blocks that were recently taken back from NTPC, potentially triggering a clash between the two ministries (coal and power) that control the state-run firms.

The three blocks in Jharkhand - Chatti-Bariatu, Chatti-Bariatu (South) and Kerandari - hold 836 million tonnes reserves that can feed all the proposed coal-based power projects of Neyveli Lignite.

If approved, allocation of the three blocks would facilitate Neyveli Lignite's foray into coal mining and coal-based power generation but the power ministry has already asked the coal ministry to review de-allocation of NTPC blocks and said if required would take up the issue with higher authorities. Neyveli Lignite plans to set up two 2,000-mw power projects at Kanpur in Uttar Pradesh and Nagapattinam in Tamil Nadu. It also proposes to set up a 1,000-mw project at Tuticorin in Tamil Nadu.The company in a written communication to the coal ministry, its parent ministry, said the projects would require around 600 million tonnes or 20 million tonnes per annum for the next 30 years. "The company has requested allocation of three coal blocks Chatti-Bariatu, Chatti-Bariatu (South) and Kerandari in Jharkhand from the recently de-allocated 14 coal blocks to meet the requirement," a coal ministry official said."The ministry would look into the demand," the ministry official said.

At present Neyveli Lignite operates four open cast mines of 30 million tonnes per annum capacity in Tamil Nadu and Rajasthan. The company uses the mined lignite to fuel 2,740-mw power projects in the two states.

The coal ministry had in May this year revoked mining licences for 14 coal blocks, including five of NTPC. The de-allocated blocks will be allotted to Coal India or its subsidiaries for mining.

NTPC has made over Rs 500-crore investment in the five mines that have been de-allocated by the coal ministry. The blocks cancellation comes as a setback to the company that expects 280 million tonnes per annum coal requirement by 2017.The company planned to meet around 70% of this requirement from domestic sources, 20% from own mines and rest 10% through imports.