Our Bureau

Ahmedabad, Nov. 20

GUJARAT will join hands with Maharashtra to jointly operate a coal mine to enhance the fuel security in both the States.

The Centre has given an in-principle approval to the two States to jointly work out an arrangement to mine coal.

"Both Maharashtra and Gujarat had asked the Centre for coal mines for captive use. As advised by the Centre, we have reached an in-principle agreement with Maharashtra and the operational details will be worked out after the blocks are allotted," the Gujarat Energy Minister, Mr Saurabh Dalal, said on Friday.

The coal will be treated as captive fuel for thermal power plants in the two States. The Minister did not specify which Gujarat and Maharashtra Government entities would carry out the mining and whether the two States would form a special purpose vehicle for the same.

The State Government-controlled Gujarat Mineral Development Corporation operates lignite mines in the State and has experience in the field.

Gujarat is also planning to take up equity stakes in coal mines abroad as part of its efforts to ensure fuel security for its coal-based power plants.

Earlier, speaking at a Confederation of Indian Industry (CII) function on gas as a fuel for power generation, Mr Dalal said gas from the Krishna-Godavari (KG) basin was expected to become available to Gujarat by 2008.

The necessary clearances had been obtained and once the pipeline work started it would be completed within two years.

(This article was published in the Business Line print edition dated November 21, 2005)
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