India: New commercial coal mines to enhance capacity, generate additional revenue in Odisha

Nine commercial coal mines put to auctions in Odisha will augment production capacity in the state by 124 million tonnes per annum (mn t pa). These coal mines endowed with a total reserve of 10,748 mn t are expected to generate jobs and bring in incremental revenue of INR 10,000 crore, an industry source said.

Among the nine commercial mines, Kuraloi-A North mine with a capacity to mine 8 million mn t pa is located in Jharsuguda district. All the balance eight commercial coal mining blocks are concentrated in Angul district – 40 mn t pa Chhendipada and Chhendipada-II, 30 mtpa Machhakata and Mahanadi, 25 mn t pa Brahmanbil and Kardabahal, 10 mn t pa Phuljhari East & West, 5 mn t pa Radhikapur (East) and 6 mn t pa Radhikapur (West) blocks.

A capital investment of INR 18,600 crore is envisaged on development of these coal mines. While these coal mines will generate direct employment for 41,912 people, while 1,25,736 people will be benefitted through indirect employment.

At present public sector companies Mahanadi Coalfields Limited (MCL)—a subsidiary of Coal India Limited (CIL) – is the largest coal producer in the state while some blocks have been allocated for captive use of aluminum and power producers. Lately, NLC India Limited, a CPSE under Ministry of Coal has started mining operations at a Talabira coal block in Sambalpur. Apart from these, Western Coalfields Limited, a Nagpur-headquartered subsidiary of Coal India has also been allocated coal block in Sundergarh district.

In a major policy shift, the Central government has opened the coal sector for private players to mine and sell coal in open market. The move is aimed at reducing the reliance on foreign coal and saving outflow of the state exchequer.

A total of 41 coal blocks has put up on sale for commercial mining in Jharkhand, Chhattisgarh, Madhya Pradesh, Maharashtra and Odisha.

It is expected that the commercial mining will save INR 30,000 crore annually on import bill. Coal imports in FY20 was 246.42 mn t, about 4% higher than 237.32 mn t fuel imported during FY19.