NALCO gets mining lease for Utkal-E coal block

Coal Insights Bureau

National Aluminium Company (NALCO) has been granted the mining lease for Utkal-E coal block by the Department of Steel & Mines, Government of Odisha, for a period of 30 years through a notification issued on April 12.

The mining lease of Utkal-E coal block is over an area of 523.73 Ha in Chendipada Tahasil of Angul District of Odisha.

The initial capacity of Utkal-E coal block is 2 million tons (mt) per year with a total mineable reserve of about 70 mt.

NALCO has already executed the mining lease for the Utkal D Coal block in March, and with the grant of these two coal blocks, the total mineable coal reserve of the Company has touched 175 mt that would meet the coal requirement of its captive power plant at Angul.

These mines were with NALCO earlier but were deallocated by the Supreme Court in 2014.

Captive power plant

NALCO operates a 1200MW (10×120MW) installed capacity coal-based captive power plant (CPP) in Angul, and provides entire electric power requirement of aluminium smelter. It also feeds approximately 35 MW of the power requirement to the alumina refinery through the state grid.

The location of captive thermal power plant at Angul is also strategic to the availability and supply of coal from nearby Talcher Coalfields.

The 18.5 kilometer captive railway system links the captive thermal power plant to the Talcher coalfields, enabling transport of the critical and bulk requirement of coal.

NALCO sources coal for its CPP mainly through long term Fuel Supply Agreements with Mahanadi Coalfields (MCL) and partly through e-auction coal and imports.

Utkal D block

NALCO is at an advanced stage of obtaining mine opening permission after execution of lease deed for 2 mtpa Utkal D coal block. The total mineable reserve is 101.68 mt.

As per the notification, the mining lease of Utkal-D coal block is over an area of 301.28 ha in villages Kosala, Nandichood, Similisahi & Raijharan under Chendipada Tahasil of Angul District. All clearances have been given by the environment ministry to Utkal-D coal block, the company recently said.

Coal supply issues to get resolved

NALCO depends upon MCL for supply of coal to its captive power plant at Angul and steam & power plant at Damanjodi. NALCO’s requirement of coal for its CPP at Angul is around 17,000 tons per day.

In October 2019, supplies dropped to around 8,000-9,000 tons following which NALCO had to draw on its buffer stocks which also got exhausted.

After that NALCO had to shut down several of its captive power plants. Coal supply shortages also forced NALCO to shut down many of the 80 electrolytic pots in the smelter plant in October. This led NALCO to draw around 190 MW from the state grid.

Short supply of coal severely impacts aluminium production and also the cost of power. Power purchased from the grid is costly as compared to pweer produced at the CPP.

Also, NALCO is planning to expand its aluminium smelter unit from 0.46 mtpa to 1 mtpa and construct a 1400-MW feeder CPP in Angul.

Both these projects need assured coal supplies.The Navaratna PSU will invest around Rs 30,000 crore by 2027-28 on expansion and diversification of which around Rs 22,000 crore will be invested on these above mentioned projects.