State-owned power giant NTPC on Friday announced incorporation of a subsidiary NTPC Mining Ltd, paving the way for its foray into commercial coal mining.
The power sector behemoth also has plans to list the coal subsidiary on stock exchanges.
"NTPC Ltd has incorporated a wholly owned subsidiary in the name of 'NTPC Mining Ltd' with Registrar of Companies, NCT of Delhi on August 29, 2019 for taking up coal mining business," the company said a BSE filing.
An official on the condition of anonymity said NTPC has the plan to set a coal subsidiary, which would cover operations of its all coal mines and will be run like a coal company.
The official also said the coal mining arm will have a culture of coal mining and will eventually help in recruiting professional with a different cadre as it would help in their career progression.
The power PSU has been allotted 10 coal mines to meet its fuel requirement, and operations five mines have already started.
Last year, the Niti Aayog had already given its approval for setting up a separate subsidiary for coal mining business. However, the approval of the coal ministry was awaited on this.
The official further said that since the coal ministry has approved the proposal to set up an arm for coal mining, the NTPC went ahead to incorporate a separate firm.
However, the official did not divulge any details about listing of the coal mining arm of NTPC on stock exchanges.
The main objective of the coal mining arm will be to sell coal to others from its mines in open market after meeting its owns requirement.
NTPC has been allotted 10 coal blocks - Pakri Barwadih, Chatti Bariatu (including Chatti Bariatu-South), Kerandari, Dulanga, Talaipalli, Bhalumuda, Banai, Mandakini-B, Banhardih (allocated to Patratu Vidyut Utapadan Nigam Ltd, a subsidiary company) and Badam Coal block with geological reserves of over 7.3 billion tonnes and production potential of about 113 million tonnes per annum.
NTPC's first coal block - Pakri-Barwadih - has been declared commercial from April 1, 2019. It is a basket mine. As much as 11.85 MT of coal has been extracted from it till Jun 2019. The production target for this mine in 2019-20 is 8.48 million tonnes.
The Dulanga block coal extraction started in March 2018. As much as 0.72 million tonnes of coal has been extracted till Jun 2019. The production target for this mine in 2019-20 is 2.50 million tonnes.
The cumulative expenditure of Rs 6,245 crore was incurred on these coal mines up to March 2019.
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