India’s SCCL firms up capex to achieve 67.5Mt production next year

KOLKATA (miningweekly.com) – India’s Singareni Collieries Company Limited (SCCL) has firmed up capital expenditure (capex) of $423-million for 2020/21 and increased its coal production target to 67.5-million tons, up from the targeted 66-million tons of the current financial year.

The SCCL board last week approved the spending plans and this was followed up by the signing of a memorandum of understanding (MoU) with the government of the southern state of Telengana setting out the coal production target for the coming financial year.

The capex would be riding on expansion of its existing mines – predominantly in the southern region, procurement of new equipment and bringing newly acquired coal blocks outside its main operational hinterland such as the Naini and Patrapura blocks in the eastern state of Odisha.

The operationalisation of the new coal blocks would ensure incremental production for the miner and move towards being a 100-million-ton-a-year coal company by 2025, a company official said.

While production from the Naini coal block was expected to start in the next financial year, about 500 000 t of coal was expected to be mined from the Patrapura block in the following financial year, the official said.

As part of its plans to diversify into renewables, the company was also in process of setting up a 300 MW solar power plant in the southern state.

Meanwhile in a recent meeting with the federal Coal Ministry, the latter assured the SCCL board that it was committed to support the miner’s move to expand its operations beyond the southern state and would look to allocate new coal blocks to the company through the preferential allotment dispensation permitted under rules for government-owned companies.

The government of Telangana holds 51% equity in SCCL while the balance of the equity is held by the government of India.