The ministry of coal on Wednesday approved allocation of 27 coal blocks, with an estimated capacity of 8 billion tonne of coal. These include, 10 blocks to power companies.
?We have approved allocation of 27 blocks which has an estimated reserves of 8 billion tonne of coal. This also includes 17 blocks to government companies for commercial mining,? a senior government official told FE.
With this, the total number of blocks allocated has gone up to 161 from current 134 blocks.
The 10 blocks allocated for the power sector has an annual capacity of ? 64 million tonne, which can produce 16,000 mw. The capacity of power generation could further improve as and when deep coal mining starts to take shape.
Also, for the first time the government has taken a bank guarantee even from public sector units. The total bank guarantee taken for blocks amounts to Rs 55O crore.
In a move aimed at expediting coal production, the ministry of coal has recently decided to take banks guarantee even from public sector companies.
Earlier only private companies were required to pay bank guarantee. The allocation of blocks is a part of government plans to expand coal production beyond Coal India Limited (CIL) and Singareni Collieries Company Ltd (SCCL).
The government intends to increase production from captive blocks to 105 million tonne by the terminal year of the 11th Plan, 2011-12.
Currently, coal production from captive coal blocks stand at paltry 17 million tonne compared to country?s total production of 360 million tonne. The captive blocks so far allocated has the potential of producing 350 million tonne of coal annually.