India’s SCCL stars $190m Adriyala coal mine

By Ajoy K Das

KOLKATA -India’s oldest coal miner Singareni Collieries Company (SCCL) has started the $190-million construction phase of the Adriyala coal project, in the southern Indian province of Andhra Pradesh.

The project would aim to extract some 2.81-million tons a year of coal from estimated reserves of 54.36-million tons, located in the Karimnagar district of the southern state.

The Adriyala investment is the largest undertaken by SCCL since 1992, when $180-million was invested in the two-million-ton-a-year Ramagundam opencast II.

“The Adriyala project will adopt underground shaft mining technology to flush out coal and will be Asia’s largest longwall installation,” said SCCL chairperson and MD, S Narsing Rao.

“The Australian government’s Commonwealth Scientific and Industrial Research Organisation has been mandated to advise on technical specification for the project,” Rao said.

The Adriyala coal project is part of the company’s plan submitted to the Coal Ministry that envisages increasing total coal production per year to 57-million tons during India's 12th Five Year Plan period (2012/17), from the current level of 52-million tons a year.

The entire production from the Adriyala coal mine would be linked to the 2 100 MW Ramagundam thermal power plant operated by India’s largest power producer, NTPC Limited.

On Thursday, SCCL and NTPC inked a long-term agreement under which the coal miner would ensure supplies of five-million tons a year of thermal grade coal to the power producer. This agreement is significant, coming close on the heels of the Coal Ministry’s decision to cancel mining rights to five coal blocks allocated to NTPC, owing to delays in initiating development work.

The coal miner sells 80% of its total production to six power utilities responsible for 6 000 MW of power generation, while 12% of production is earmarked for the cement industry.

However, the proportion of merchant saleable coal would change dramatically with SCCL marking its foray into power generation and earmarking a large part of production for captive consumption.

SCCL has achieved financial closure for its $1.4-billion Adilabad power project in Andhra Pradesh, where it will construct two 600 MW units.

SCCL, the second largest Indian coal miner after Coal India, operates 13 opencast and 42 underground mines in the Godavari River Valley, in southern India, producing 52-million tons a year of coal. The Godavari River Valley basin is estimated to have a coal reserve of 8.79-billion tons along a single 350-km stretch. Edited by Esmarie Swanepoel, Mining Weekly