Coal India eyes power generation

Coal India Ltd (CIL) is looking at the possibility of setting up a joint venture power plant in collaboration with the National Thermal Power Corporation (NTPC).

The chairman of both the companies are scheduled to meet this week to discuss the issue.

Shashi Kumar, CIL chairman, said, "The possibility of floating a separate joint venture power company is not being ruled out. The chairman of NTPC has expressed his intention of a discussion with CIL and we are scheduled to meet in a few days."

Meanwhile, CIL has firmed up Rs 14,000 crore investments for the 11th Five Year plan period and has targeted total coal production of 550 million tonne.

In 2005-06 the company has set a goal of 343 million tonne. In 2004-05 CIL mined close to 323 million tonne.

Addressing the Confederation of Indian Industry's annual regional meeting and international conference on minerals-metals-manufacturing here, Kumar said the environment related litigation had affected 58 CIL mines.

This could result in their closure.

"If closed down, the country would see a shortage of around 80 million tonne of coal, which would lead to acute shortage for power sector and other users," he warned.

Meanwhile, the joint venture power plant envisaged with Neyveli Lignite Corporation (NLC) has hit a road block with coal linkage not being available for the project.

This project was announced by former coal minister Mamata Banerjee and was proposed to be set up through Eastern Coal Fields and NLC in West Bengal.

CIL was also in the process of setting up a power plant at Ranigunj through its subsidiary ECL.

This plant was slated to use coal mine methane as fuel. Coal mines in India, specially in the Ranigunj area, have large reserves of methane gas which gets released into the atmosphere when mining activities are initiated.

CIL is also toying with the idea to setting up a joint venture company with a power producer to run the plant that would come up close to a mining block.

Kumar said CIL had plans to add value to its coal by diversifying operations.

All its seven production subsidiaries would give priority to produce more washed and proper sized coal which sell at higher prices.