Orissa Mining Corporation to set up coal subsidiary

Bhubaneswar (Odisha):  The state government has given a go-ahead signal for setting up of a 100 per cent subsidiary of the state-run Orissa Mining Corporation (OMC) for development of coal blocks. The idea is to undertake development of world-class coal mining projects in the state, parallel to the coal projects of the Mahanadi Coalfields Limited (MCL).

The OMC authorities pointed out that by 2015-16 the requirement of coal in the State would touch 140 million tonnes per annum (MTPA). With the state government signing MoUs for steel, power, alumina and other mega industries, the coal requirement would increase. Even if the MCL increases its production, it can cater about 40 MTPA to the State’s industries, leaving a shortage of around 100 MTPA. In order to meet the critical power requirement of the industries, this gap in the coal availability has to be bridged, the OMC authorities felt.

The OMC undertook a detailed study on the status of allocation of coal blocks and the requirement of coal for the state in future. It engaged PWC, Hyderabad, which identified a number of suitable coal blocks for allotment in favour of the state. Accordingly, chief minister Naveen Patnaik has drawn the attention of the prime minister to the need for allocation of coal blocks with a reserve of 5,000 MT, preferably in contiguous locations in MCL’s favour.

The Centre has been allotting coal blocks to the state government and private companies with a view to bridging the gap between demand and supply in the country. Odisha being the second largest coal-bearing state, it should have been given a substantial share in allocation of coal reserves, Patnaik said in his letter to the prime minister.

In contrast, the State Government companies have been allotted only 14.75 per cent of the total allotted coal reserve in the State, whereas other State Government companies have been allowed to exploit 47.09 per cent of their coal reserve. The OMC and the Odisha Hydro Power Corporation (OHPC) have been allotted 500 MT of coal reserve, while applications submitted seek 5,000 MT. All other major coal-bearing States like Jharkhand, Chhattisgarh and West Bengal have been allotted reserves for commercial use to an extent of 19 per cent of the total allotted quantity for commercial use in the country, whereas Odisha has been allotted only 7.58 per cent. Keeping this in view, the chief minister has demanded a major share in coal reserve and, accordingly, groundwork has been done by the OMC.

So, the OMC has proposed that the new coal blocks identified for allotment be developed by an OMC Coal Limited.  The OMC has a kitty of Rs 3,000 crore and can afford to incorporate a 100 per cent subsidiary, said its proposal. Taking this into account, the chief minister has cleared the proposal of creation of a separate subsidiary of the OMC for development and commercial exploitation of coal, said an official.