Coal India Limited (CIL) subsidiary Mahanadi Coalfields Ltd (MCL) has started lifting 6,000 tonnes per day from the Manoharpur captive mine in Jharsuguda district allotted to Orissa Coal and Power Limited(OCPL), owned by the Odisha government.
Mahanadi Coalfields Limited (MCL), a subsidiary of CIL, and OCPL have entered into an MoU for provisioning of selling excess fuel from Manoharpur coal block in Jharsuguda to the miner. The deal draws on the government’s aim of increasing competitiveness and making captive mine auctions/allotments commercially attractive by giving owners the freedom to sell surplus output. In February, the government had further made it more attractive by allowing the sale of 25% production which will help CIL reduce supply backlog to non-power consumers, and has come down 1,600 rakes from 5,100 rakes.
Manoharpur block with a production capacity of 8 million tonnes per annum was allocated to OCPL in August 2015 to supply coal to the IB thermal power plant, owned by Odisha Power Generation Corporation (OPGC).
Although coal production from the captive mine has started, the fuel could not reach the thermal power plant due to evacuation bottlenecks, forcing OCPL to stop mining. MCL had stepped in to supply coal to OPGC through bridge linkage to the tune of 4.8 million tonnes per annum till the time production started from this block.
Bridge linkage is a short term linkage to bridge the gap between the requirement of coal of a specified end-use plant and the start of production from the allotted coal block.
The MoU would help OCPL lower its stockpile and sell coal, but at the same time, the company can also continue production from Manoharpur block. The move is part of a series of measures taken by the Centre to make more indigenous coal available in the country beyond CIL’s production.
Coal produced from coal blocks allocated by the government is primarily used for captive consumption in the designated end-use power plants but in a situation where the coal produced exceeds the requirement of the designated end-use power plant, there is a provision in the Coal Mines Development and Production Agreement to supply such excess coal to Coal India Limited(CIL). CIL may in turn supply the coal thus received to its own customers thereby making more domestic coal available in the system to bridge the gap between demand and availability.
