A Coal Ministry panel has recommended extending the bridge linkage for supply of coal by a year for the State-run National Aluminium Company (Nalco) to ensure sustainable production from its aluminium smelter.

The company had sought an extension for two years, till March 2025, for the bridge linkage for Utkal D and Utkal E coal mines owing to delays in commencing production at these blocks.

Coal Ministry’s Standing Linkage Committee (long-term) for Power Sector (SLC (LT)), met in February 2023 to deliberate on various coal supply related issues, including Nalco’s submission.

“Keeping in view the discussions held and recommendation of the Ministry of Mines, SLC (LT) recommended for extension of bridge linkage to Unit 9 and l0 (120 MW each) of captive power plants (CPPs) of Nalco for a period of one year on tapering basis,” the committee said.

The rates for coal supplies against extended bridge linkages would be decided by Coal India (CIL) and Singareni Collieries Company, it added.

Bridge linkage

Nalco in its submission before the panel said that mining operations have commenced at Utkal D coal mine, while operations will start soon at Utkal E. However, there are issues over coal evacuation from the mines to CPPs for which a separate rail or road corridor is required. Besides, coal production is yet to start from its mines.

Mines Ministry, which is the controlling ministry for Nalco, pointed out that Railways is most likely to take up the rail corridor project for coal evacuation from that area and the corridor is expected to be completed by 2025. The Ministry also recommended for extension of the bridge linkage for smooth functioning of CPPs.

The aluminium manufacturer had informed the committee that it is facing delays in starting production from the allotted coal mines and has not been able to stick to the commencement schedule due to factors beyond its control.

The delays include obtaining forest clearances, environmental clearances, land acquisition, revising boundary coordinates, besides the delays owing to the Covid pandemic in the last three years.

Coal blocks

In September 2016, the SLC (LT) granted bridge linkages from CIL to Nalco’s Unit 9 and 10 of CPP based on allotment of Utkal D and E coal blocks. The matter of extension of bridge linkage was taken up in the SLC (LT) meeting in December 2018 and the extension was recommended for the Navratna company’s units up to March 2021.

Again, the extension of bridge linkages was taken up by the committee in February 2021 and it had recommended the extension up to March 2023.

Nalco obtained the mine opening permission for the Utkal D coal mine in May 2021. Furthermore, the approved mine plan for Utkal D and E coal blocks was obtained in February 2022.

One of India’s largest integrated Bauxite-Alumina-Aluminium-Power complex, Nalco has been operating its captive Panchpatmali bauxite mine with 68.25 lakh tonnes per annum (LTPA) for the pit head 21-LTPA (normative capacity) alumina refinery at Damanjodi in Koraput district of Odisha.

Besides, it has an aluminium smelter with a capacity of 4.60 LTPA and a 1,200-MW CPP at Angul in Odisha. The central government holds 51.28 per cent stake in the company.