KOLKATA (miningweekly.com) - India’s largest power producer NTPC Limited has placed up to eight bids to secure coal blocks to achieve backward integration for a presence across the value chain in mining, power generation, transmission and distribution.

The Indian government has received 107 applications for 43 coal blocks earmarked for government-owned and managed companies under the ‘allotment system’, with NTPC pitching for the highest number of these, an official in the Ministry of Coal said.

The power producer was aiming to secure minimum captive coal supplies of around 70-million tonnes a year from the government’s move to allot coal blocks to public sector companies, outside the purview of the ongoing auction of coal blocks to other sectors.

As per the contours of a strategic plan for its coal mining operations, NTPC would be looking at an investment of around $8-billion over the next few years to achieve near self-sufficiency in coal supplies from its own captive mines and thereby ensure its presence across the value chain, the official said.

NTPC was looking to raise debt of around $2-billion to fund its planned capital expenditure of $3.7-billion during 2015/16, the bulk of which would be riding on developing the coal blocks it expected to bag under the government allocation system.

It has been estimated by the power producer that the total coal requirement to feed thermal power plants currently under operation or scheduled to go on stream by 2018, would rise to 220-million tonnes a year. The company had set a redline that at any given point, imports should not exceed more than 10% of total demand for coal feedstock.

In 2013, NTPC proposed to enter coal mining and establish a separate independent mining entity; however, these plans received a jolt when the Supreme Court cancelled all mining leases, barring one, accorded to it over the last decade.

However entering the mining segment had been given a fresh lease of life with the power producer pitching for eight of the richest coal blocks of the 43 to be offered to government companies.

In September 2014, NTPC floated an expression of interest (EoI) seeking offers for equity participation from coal asset owners overseas to ensure a steady supply of feedstock to be blended with inferior quality coal sourced from Coal India Limited (CIL). But no updated information on response to the EoI was available.

NTPC with an installed capacity of 43.138 MW from the 38 thermal plants it operated, required around 180-million tonnes a year of coal of which 80% was supplied by CIL.