Infrastructure major Adani Enterprises has begun coal mining operations at the Parsa East-Kante Basin mine in Chhattisgarh.
The mine is owned by the Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RRVUNL), which is a state-owned power utility.
The block holds reserves of over 450 million tonnes. Initially, two million tonnes will be produced annually and ramped up to 15 million tonnes a year from 2017. The Adanis have outlined a phased capital outlay of Rs 3,000 crore for the coal block.
The Parsa East- Kante block in Chhattisgarh was awarded to RRVUNL in 2007. RRVUNL floated a tender seeking MDO services which the Adanis bagged.
The contract is being executed by Adani Mining, a 100 per cent subsidiary of Adani Enterprises.
Adani Enterprises function is that of a mine developer-cum-operator (MDO).
MDO is a concept wherein a coal block owner contracts the entire operations to a third party, which takes the responsibility of land acquisition, resettlement and rehabilitation, mining, developing and mine operations. The MDO will bring in the investment needed for the coal production. It will supply coal at a tender determined price to the power plants of the mine owner.
With this, Adani Enterprises said it will become the largest private coal miner with access to produce coal of up to 90 million tonnes and reserves of over three billion tonnes over the next 30 years. This would be sufficient to produce about 18,000 MW of electricity by the state electricity boards.
Gautam Adani, Chairman, Adani Group said, “The commencement of coal mining at Parsa Kante is a milestone event in coal mining sector.”
As per the contract, the Adanis will also set up a coal washery, coal handling and railway siding infrastructure to transport coal to RRVUNL’s power plants in Rajasthan.
The washed coal from Parsa East- Kante Basin block will ensure that RRVUNL runs its power plants at a PLF (plant load factor) of over 95 per cent and make the state power surplus, Adanis said.
This is the first of the four MDO contracts bagged by Adani Enterprises.
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 million tonnes, Machakatta block in Odisha owned by MahaGuj Collieries with reserves of 1.2 billion tonnes and the Chendipada coal block, also in Odisha, owned by UCM Coal Company with reserves of 1.5 billion tonnes.
The Adani Group aims to produce 200 million tonnes of coal across its mining assets globally by 2020.
The Group has a producing mine in Indonesia and has just flagged off a coal exploration programme in the Carmichael mine, in the Galilee Basin of Queensland, Australia. It expects to commence coal production from its Australian operations by 2016.