R-Power to spend Rs 3,000 cr for mines to fuel Sasan project

Awaits government nod for plan to develop mines in a strategic partnership with North American Coal Corporation.

Reliance Power Limited, the flagship company of the Reliance Anil Dhirubhai Ambani Group(ADAG), plans to invest about Rs 2,500-3,000 crore over a period of three years, to develop three coal mines to fuel its Sasan Ultra Mega Power Project in Madhya Pradesh.

"We have submitted the plan for the pit-head mines, to be developed in a strategic partnership with the North American Coal Corporation (NACC), to the ministry of coal and expect the final clearance within a few months," a top Reliance Power, official told Business Standard.

NACC, the largest lignite coal producer and among the top ten coal producers in the US, will provide technical assistance, including evaluation of geological data, mine planning and design, supervision of mining operations and training for Reliance professionals, according to the memorandum of understanding (MoU) signed with Reliance Power.

Biggest ever
Sources said the coal mining plans of Reliance Power for the Sasan project would be one of the largest and unprecedented in India, with advanced coal handling equipment.

One of the transportation vehicles (of 240 tonne capacity) that will be used is equivalent to the size of four railway wagons.

The company has placed orders for modern coal handling equipment with four to five leading manufacturers in the US and Europe, said the official.

Sasan Power Limited (SPL), a fully owned subsidiary of Reliance Power, has about 750 million tonnes of coal reserves at Moher (capacity of 402 mt), Chattrasal (150 mt) and Moher-Amlori Extension (198 mt), over an area of about 6,000 acres in and around the proposed power project.

Coal requirement
The Rs 18,300 crore Sasan project is scheduled to go on-stream with the first 660 mw unit of the 3,960 mw project to go on-line ahead of schedule within a few years. The ultra mega power project will require about 15 million tonnes of coal annually.

According to sources, Reliance Power was among the first to submit a coal development plan for captive coal blocks allocated in the past few years.

The Sasan project was awarded to Reliance Power in August 2007 and the coal development plan was developed and submitted within few months, said the official.

First of nine
In the case of some captive coal blocks allocated to power producers such as National Thermal Power Corporation, the development plan has not been submitted even after nearly five years, the sources said.

Sasan is the first of eight or nine such mega power projects planned in the country, and was scheduled to be fully commissioned by April 2016, with six 660 mw units planned.

However, Reliance Power is working to commission the project ahead of schedule by fast tracking the entire process, said the official.

Reliance Power currently has access to coal reserves of about one billion tonnes in India and abroad, including a coal mine in Indonesia, which it acquired recently.

In India, the company has access to another 150 million tonnes of coal, along with five others who were allocated mines in Orissa and Chattisgarh.

Reliance Power is setting up 13 projects with a total capacity of over 28,200 mw. Seven of them are coal fired projects. Coal will be imported for the Krishnapatanam and Shahanpur projects.