Centre allots captive coal mine to APGenco

Tadicherla block at Singareni to meet Genco's requirements of 500-mw unit proposed at Bhupalapalli

The Union coal ministry has allotted the first captive coal mine block in Singareni to the Andhra Pradesh Power Generation Corporation (APGenco). The Tadicherla block, which is estimated to have 50 million tonnes of coal reserves, had been taken out from the open bidding route with an express intension to award it to the state-owned company.

"We received a communication to this effect from the Union coal ministry four days back," Ajay Jain, chairman & managing director of APGenco, told Business Standard on Monday.

APGenco had applied for this block to meet the requirements of a 500-mw second thermal unit proposed at Bhupalapalli in Warangal district. The first 500-mw unit, which is in the pipeline, has received the coal linkage from the state-owned Singareni Collieries Company Limited (SCCL).

According to Jain, the Tadicherla block will be sufficient to run a 500-mw unit for 25 years. Mining will be done through opencast operations for which a joint venture or technology partner is expected to be finalised through a global bidding process.

Recently a team of a UK-based firm approached the Andhra Pradesh government and offered to undertake mining in Tadicherla block for APGenco at a much lower cost than by SCCL. The opencast mining in this block is said to cost relatively higher due to the presence of huge overburden.

The state government is understood to have told the company representatives of its intention to invite global tenders for identifying a partner for APGenco for mining and suggested that they wait for the moment.

Originally, seven coal blocks in Singareni coalfields were identified for privatisation for the captive mining purposes but subsequently, the number was brought down to five. Tadicherla is considered the best among the rest of the coal blocks identified for captive mining.

Beside Tadicherla, APGenco has also bid for the allotment of three more coal blocks, which are part of the open tender route, Jain said. Of them, two are meant to cater to the requirement of a 500-mw unit proposed at Kotha Gudem Thermal Power Station (KTPS) in Khammam district and one block is meant for a 1,600-mw thermal power project proposed at the port town of Krishnapatnam in Nellore district. This proposal is still in the initial stages.