Adani commences coal production at RRVUNL's Chhattisgarh mine
New Delhi: Adani Group flagship Adani Enterprises on Monday said it has started coal production at Rajasthan state power generation utility RRVUNL's block in Chhattisgarh and has earmarked Rs 3,000 crore for developing the mine.
With the development, Adani Enterprises is set to emerge as the largest private coal miner with access to produce coal of up to 90 million tonnes (MT) and reserves of over 3 billion tonnes (BT) over next 30 years, sufficient to produce 18,000 MWs of power by state electricity boards, the company said.
"Adani Enterprises today announced commencement of its ambitious integrated coal mine developer-cum-operator (MDO) operations with the start of coal production at the Parsa East-Kente Basin mine in Chhattisgarh, owned by Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL)," it said in a statement.
This is the first amongst the four MDO contracts bagged by the company and marks the beginning of Adani Group's 'Resources' business vertical in India, the company said, adding it has outlined a phased capital outlay of Rs 3,000 crore for the Chhattisgarh block.
Group Chairman Gautam Adani said, "The commencement of coal mining at Parsa Kente is a milestone event in coal mining sector. With this we at Adani rededicate ourselves to work resolutely towards energy security of the country."
The block in Chhattisgarh was awarded to RRVUNL in 2007 and the state power utility in turn had issued a tender seeking MDO services, which was bagged by Adani Enterprises.
The contract is now being executed by Adani Mining, a wholly owned subsidiary of Adani Enterprises.
The block has reserves of over 450 MT of coal and will produce 2 MT a year initially to be ramped to 15 MT a year from 2017 onwards.
As per contract, Adani Mining will set up a coal washery, a coal handling plant and railway siding infrastructure to transport coal to RRVUNL's fuel-starved power plants in state.
The washed coal from Parsa East- Kente Basin block will be of a superior quality and will help RRVUNL run its power plants at a plant load factor of over 95 percent and will make the state power surplus, the company said.
Relatively new in the country, MDO is a concept where in a coal block owner contracts entire operations to a third party, which takes the responsibility of land acquisition, resettlement and rehabilitation, mining, developing and operating the particular mine by investing in it and then supplying the coal at a tender determined price.
The other three MDO blocks contracted to Adani Enterprises are ? Parsa block in Chhattisgarh, owned by Chhattisgarh State Power Generation Co with reserves of 150 MT, Machakatta block in Odisha owned by MahaGuj Collieries with reserves of 1.2 BT tonnes and Chendipada block, also in Odisha, owned by UCM Coal Company with reserves of 1.5 BT.
The Adani Group aims to produce 200 MT of coal across its mining assets globally by 2020, the company said.
The group has a producing mine in Indonesia and has flagged off a coal exploration programme in the Carmichael mine, the biggest global coal mine tenement in the Galilee Basin of Queensland Australia, it added.
The group, a global infrastructure player, plans to commence production of coal from its Australian operations by 2016.