NLC to pick up 15% stake in coal JV

KOLKATA: Neyveli Lignite Corporation (NLC) has decided to pick up 15% stake in a joint venture to mine coal in Orissa. The project is being promoted as a three-way joint venture between NLC, Mahanadi Coalfields Ltd (MCL) and Hindalco Industries with the latter holding 70% and 15% of the shares, respectively.

The project is linked to NLC's plan of setting up a 2,000 MW super thermal power project in Orissa's Ib valley. "We have decided to pick up 15% stake in the coal mining venture which will supply the feedstock to our proposed 2,000 MW power project in Orissa," a source told ET.

"The mining venture will be executed through a separate company which is likely to be incorporated within a month," the source added. The power project estimated to require an investment of around Rs 8,000 crore, will however, be taken up by NLC itself.

"The estimated size of the total reserves of coal in the Taladera region is substantial. On a rough estimate basis the venture is likely to mine around 15 million tonnes of coal per year. The output will be shared between the three partners," the source added. For NLC, the Orissa project will be its first foray into coal-based power generation. The company has earlier announced plans of executing large lignite-based power projects in partnership with state government in Tamil Nadu, Rajasthan, Madhya Pradesh and more recently in Gujarat.

In Gujarat, NLC will pick up at least 74% stake in a joint venture with the Gujarat government for setting up a 1,000 MW power plant and develop a eight million tonne (mt) lignite mine in the state at an estimated investment of Rs 5,500 crore. These ventures are a part of Neyveli Lignite's strategic bid to evolve from a coal company into an integrated fuel company.