NLC keen on developing lignite mine in Rajasthan

Joseph Vackayil

Neyveli, July 15: Neyveli Lignite Corporation Ltd (NLC) has approached the Rajasthan government for sanction to develop a lignite mine and to set up of a 240-mw power plant in the state.
Rajasthan has an estimated lignite reserve of 2,381 million tonne. Of this 609 million tonne are under proved category. However, lignite production now is only at around 0.222 million tonne a year.

NLC, with its improved financial position, is seeking the approval of the Rajasthan government to carry out the project, Mr A K Sahay, chairman and managing director of NLC, told The Financial Express.

‘‘In fact, it is just the revival of a proposal made in 1987,’’ he said. A memorandum of understanding (MoU) was signed among the Union government, government of Rajasthan and NLC in November 1987 for developing a lignite mine for producing 1.7 million tonne annually at a cost of Rs 242.31 crore. A 240 mw (2x120) lignite-based power plant at a cost of Rs 585.73 crore also was proposed.

The Union government approved the Barsingsar lignite-mine-cum-power project in April 1991 at an estimated combined cost of Rs 828.04 crore.

Though NLC had taken over the project for implementation, it had abandoned it owing to ‘‘financial crunch’’. In October 1996, Rajasthan offered the project to Hindustan Development Corporation to be its sponsor. Hindustan Vidyut Corporation Ltd was to build, operate and maintain the Barsingsar project. The private agency is yet to ensure financial closure.

‘‘It is in this context NLC is approaching the Rajasthan government expressing willingness to take back the project,’’ Mr Sahay said. Rajasthan is yet to reallocate the project to NLC.

Meanwhile, NLC is considering the invitation of the Gujarat Mining Development Corporation (GMDC) to take over the Akrimota power project. ‘‘We are working out the modalities for a joint venture with GMDC,’’ he said.

The lignite-based power project of 250 mw (125x2 mw) capacity is estimated to cost Rs 1,398 crore. GMDC has already signed a power purchase agreement with the Gujarat Electricity Board.