A van waits for a loading of coal in a mine in China. (Photographer: Lucas Schifres/Bloomberg News.)

NTPC To Set Up A Subsidiary For Coal Mining Soon

State-run power giant NTPC Ltd. will soon set up a subsidiary to handle coal mining operations as it plans to enter commercial coal mining after meeting its own requirement, an official said.

“The NTPC will set a coal subsidiary. It would cover operations of its all coal mines and will be run like a coal company. It will have a culture of coal mining. This will help in recruiting professional and have a different cadre which would eventually help in their career progression,” the official said on the condition of anonymity.

The power sector behemoth also has a plan to list the coal subsidiary subsequently on stock exchanges. The power PSU has been allotted 10 coal mines to meet its fuel requirement of which work has been started in five mines.

NITI Aayog has already given its approval for setting up a separate subsidiary for coal mining business. Finance Ministry’s approval has been sought for the purpose.
NTPC Official

He added that there is a possibility of commercial coal mining at a later stage. “The company will sell coal to others from these coal mines in open market. But that will happen only after the NTPC meets its owns requirement,” the official said. “Thereafter, the surplus would be sold in open market.”

There are plans to list the subsidiary on the bourse at a later stage.

NTPC has been allotted 10 coal blocks with geological reserve of over 7.3 billion tonnes and production potential of about 111 million metric tonnes per annum. At present, the power PSU is working on five coal blocks with total geological reserves of 3.8 billion tonnes and mining capacity of 56 MMTPA.

NTPC has started mining at its first coal block Pakri-Barwadih in Jharkhand. As much as 4.3 MMT of coal has been extracted till June 2018. The production target for this mine in 2018-19 is 6.27 MMT. Besides mining has been started at Dulanga mines in Orissa. The company plans to produce 1.68 MMT in 2018-19 from Dulanga mines.

The company has incurred a cumulative expenditure of Rs 5,063.75 crore till March 2018 for coal mining. During first quarter of this fiscal Rs 350.56 crore has been incurred on coal mining by the company.