Sasan ultra mega power project to get coal by December 2012, even before plant is commissioned.
Anil Ambani’s flagship power company does not want to stop at just being a leading power generator. It is aspiring to emerge as a leading coal miner as well.
At a time when fuel linkage has been crippling growth plans for most of its peers, Reliance Power (R-Power) may soon rub shoulders with top coal producers of the world.
To secure raw materials for its 4,000-megawatt (Mw) ultra mega power project (UMPP) in Sasan, Madhya Pradesh, it has intensified development work at the captive Moher & Moher Amlohri coal mines in order to begin operations by December 2012, so that the fuel linkage is in place ahead of the commissioning of the first 660-Mw unit in Sasan, scheduled for January 2013.
These two mines alone have a coal reserve of 600 million tonnes (mt). R-Power plans to extract 20 mt of coal annually for the next three decades. Additionally, Sasan also has the Chhatrasal mine, which has a reserve of 150 mt. But its mine development plans are not yet finalised. These three mines are enough to fire 8,000 Mw of thermal power, and will even support the 4,000-Mw Chitrangi Project, in addition to Sasan. Both plants will be in Madhya Pradesh.
Moreover, R-Power has three captive mines in Jharkhand with a combined reserve of 1.3 billion tonnes for its Tilaiya UMPP. To support the coastal UMPP project at Krishnapatnam, Andhra Pradesh, it also has three mines in Sumatra, Indonesia with an estimated reserve of two billion tonnes. Put together, this makes R-Power’s coal portfolio the largest amongst all its private sector peers.
The fuel linkage becomes significant as most other private power projects like Tata Power’s Mundra (Gujarat) and JSW Energy’s Ratnagiri (Maharashtra), along with R-Power’s Krishnapatnam, are now bearing the brunt of a volatile international coal situation. Global coal prices, which have gone up by 40-50 per cent in the last one year, can affect the viability of these projects. Projects like Lanco’s Amarkantak and Sterlite Power’s Orissa projects that rely upon domestic coal from state-run Coal India are also seeing cost escalation and supply disruption.
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But with Sasan coming on stream first, there has been a steady progress in mining infrastructure works at the Moher & Moher Amlohri site. According to company officials, the erection yard is ready for commissioning of draglines, shovels, dumpers and other equipment. The equipment orders are also getting delivered on ground. The first batch of three electric shovels has already reached the mine site and are currently being erected. These shovels are scheduled to start operation by the end of this year. Three more are en route. The first batch of dump trucks and drills have been shipped from Houston, US, and the first batch of four dozers have reached the Kolkata port from Japan.
Many of these large equipment supplied by Bucyrus of US, now part of Caterpillar, Atlas Copco, US, and Komatsu of Japan will be used for the first time in India, to improve the productivity from the mines. “Sasan coal mines are being developed on a par with International norms of productivity. We have ensured the best combination of globally experienced team and state-of-the-art equipment are in place for our mines,” said R-Power CEO J P Chalasani.
The imports of these equipment have been bankrolled by US Exim Bank, which has agreed to sanction $917 million just to support the import of mining equipment from US vendors.
The 100-member mining manpower is headed by Australian industry veteran Russell Taylor. R-Power has also roped in North American Coal Corporation, the largest brown coal mining company of the US, to develop the mine plan.
These developments are happening alongside the phased construction of the Sasan power plant. Four 660-Mw boiler and turbine units from China’s Shanghai Electric have already been delivered to the site.