NTPC cancels allocation of Banai-Bhalumuda to JSW Steel

14 Jun 2023 , 02:14 AM

The award of the Banai-Bhalumuda coal block to JSW Steel, which the latter company had won under the sixth tranche of the commercial mining auction in November, has been challenged by NTPC. NTPC had previously planned to develop these mines for captive use.

According to news reports, the state-run power generator had asked the coal ministry for approval to unite these two blocks, but this was not permitted. After that, they claimed that NTPC gave up these mines in 2020.

The lack of non-coal areas for external overburden disposal, high stripping, high beginning depth, and the low level of recovery of coal reserves, according to NTPC, would increase the cost of coal from the mines. However, the two blocks were classified as a single block when the coal ministry put out coal blocks for sale in November 2022, which ‘surprise’ NTPC, according to one of the reports.

According to the source who talked to ET, NTPC would not have given up these blocks if it had been permitted to integrate them because it would have been able to furnish its power plants with cheaper coal, which would have ultimately benefited users.

The Ministry of Coal stated that it was not aware of any reported request from NTPC to revoke JSW Steel’s allotment of the coal mines at Banai and Bhalumuda. The coal ministry responded to ET by stating that NTPC took part in the sixth round of coal auctions by placing a bid for just the Burapahar coal mine in Odisha. The ministry continued, ‘NTPC might have made a bid for the Banai & Bhalumuda coal mines in Chhattisgarh if it had been interested in these mines.

The 29 mines that were successfully auctioned off in the sixth round have a total of 1,376 million tonnes of coal reserves. The max rated capacity of the aforementioned mines is 15 million tonnes per year.

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