NTPC may seek partner for coal mining block

The Power ministry is in favour of National Thermal Power Corporation (NTPC) going in for a joint venture with a private sector player for exploitation of the coal mining block awarded to it by the coal ministry.

The public sector power major had been given in principle award of the Pakri Barwadih coal block in North Karanpura coalfields in Bihar.

"We would prefer the company going in for a 24:76 partnership with a private player, with the private player taking a majority stake in the joint venture. This would ensure faster development of the mine," said an official in the Power Ministry.

NTPC officials however say that they have been awarded the project under the public sector dispensation and it has to be executed by NTPC or by its subsidiary, where NTPC has a 51 per cent share.

NTPC had been demanding captive coal blocks in order to enable it to ensure supply to its coal based power stations. Nearly 82 per cent of its stations are coal fired, while the remaining operate on natural gas.

Nine of the company's 13 coal-fired stations are located at the pit head. Of this, 7 are located within 25 km of the coal mine and these stations are serviced by dedicated rail lines which are owned and operated by NTPC, ensuring greater security of fuel supply. The company is attempting backward linkage into the fuel supply chain in the coal as well as gas business.

The captive mine was awarded to NTPC on account of coal supplies to most plants not keeping pace with requirements to meet generation targets. The problem is particularly acute in case of coal supplies from Northern Coalfields, Eastern Coalfields and Mahanadi Coalfields.

The Power ministry had argued that as there was a delay in development of linked mines by national coal companies, captive mining would not only bring in much needed investment, but also facilitate development of mines in a shorter timeframe.