The Hindu Business Line : `Indal can use coal block only for proposed project'

CONTRARY to the claim by Indian Aluminium Company Ltd (Indal) that a virgin coal block (Talabira-I) was allotted to the company a few years ago for meeting the requirement of its existing 67.5 MW captive power plant, Coal India Ltd (CIL) has clarified that the block was not allotted to Indal for its existing captive power plant. The company was allowed to use coal mined from the block only for the proposed expansion project.

CIL has stated that the screening committee in the Union Ministry of Coal, in its recent meeting, clarified to the party (Indal) that the coal mined from the captive block should only be used for the proposed expansion project but not for the existing power plant, which already has a linkage from Mahanadi Coalfields Ltd (MCL).

It is pointed out, "there is absolutely no restriction on Indal using this coal for their expansion power project as per the condition of allocation."

It is also clarified by CIL that the Coal Mines (Nationalisation) Act does not permit private companies to mine coal except when they set up an end use power or steel or cement plant. On receipt of report from MCL that Indal was mining coal (from Talabira-I block) and as expansion power project had not been commissioned, coupled with the fact that the offtake from MCL had declined, Indal was directed not to mine coal from this captive block for use of its existing power plant, said CIL.

It is pointed out that that Indal's captive power plant (CPP) of 67.5 MW capacity has a long-term linkage of 0.30-0.35 million tonnes per annum of F/G grade coal from IB Valley Coalfields of MCL. The company has been receiving coal even beyond it on the allocation made the Standing Linkage Committee (SLC). For the quarter January-March, 2004, a monthly quantity of 29,167 tonnes has been allotted the company's CPP at Hirakud in Orissa from MCL-IB Valley by "road" mode. However, a senior level source of Indal that the company endeavoured to develop the Talabira-I block at a record low time, entailing an investment of about Rs 30 crore, while expansion programme of its captive power plant is progressing fast. Baffled by the Union Coal Ministry's stand on the usage of Talabira coal, the Indal source feels that this will have adverse impact on the development of domestic coal mining sector through private initiative. In the case of Indal, it will have to keep the coal surface exposed for long till expansion of captive power project is complete.

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