KOLKATA (miningweekly.com) - India’s Singareni Collieries Company Limited (SCCL) will spread its wings beyond its operational home base in southern India to the eastern and central regions to achieve its production target of 80-million tonnes a year by 2020.

The geographical expansion would include expanding its mining operations to the eastern Indian provinces of Odisha and Chhattisgarh, with SCCL seeking new coal blocks from the federal government which had recently started the process of allocating 36 coal blocks to government entities.

For the government-owned and managed SCCL, expanding mining operations beyond its current location in the newly carved-out province of Telengana was in line with its large diversification plans to establish thermal power generating plants aggregating a total capacity of 8 000 MW, the newly appointed chairperson and MD N Sridhar said.

The thermal power projects planned and under implementation would require about 40-million tonnes a year of coal and the incremental demand could only be met if SCCL continued to expand mining operations in new coal blocks across the country, he said.

SCCL’s target of 80-million tonnes a year would be achieved through 10% yearly growth in coal production from current levels of 39-million tonnes a year.

The immediate priority of the company was to complete the 2 x 600 MW thermal power project located in the Adilabad district in Telengana within the current calendar year and ensure dry fuel feedstock from the company’s existing mines.

The thermal power plant would have to bank on SCCL increasing its coal production by at least another 15-million tonnes a year in the current year.

Another reason the miner was seeking coal blocks in other parts of the country was to derisk its high cost mining operations in some of the ageing coal blocks where its current mining operations were confined.

The company’s cost of production from its existing opencast mines was about $30/t and as high as $61/t from underground mines, hence the strategic plan to seek coal blocks in eastern and central India.

SCCL presently operated 32 underground mines and 16 opencast mines across the coal reserves at the Godavari River Valley, which had an estimated reserves of 10-billion tonnes along a single stretch of 350 km.