Government is open to the idea of allowing power generating companies to use surplus coal for a project other than the one for which the block was allotted, as in the case of Reliance Power’s 4,000 Mw Ultra Mega Power Project (UMPP) at Sasan in Madhya Pradesh, sources said today.

“If a company is able to mine more than the estimated production on account of new mining techniques and further exploration and if the firm has its projects to utilise that surplus, the company can use it but with prior permission from the government,” a top coal ministry official told PTI today.

Reliance Power was recently permitted to use the surplus coal from blocks allocated to its Sasan project for its another project at Chitrangi in the same state. Tata Power has also sought a similar permission from the government for its UMPP at Mundra in Gujarat.

Asserting that Sasan was not an exception to the use of excess coal from captive blocks, the official said similar approvals were given to West Bengal Power Corporation as well.

“West Bengal Power Corporation was given a coal block with estimated production of 4 million tonnes per annum, they mined about 15 million tonnes from the block. They were given permission to utilise it in their other projects,” he said.

When asked, how will the government gain from such a move, the official, who did not want to be named, said, “We gain in terms of royalty we get from the coal produced from the blocks. More output would result into higher royalty.”

On an average, state governments earn around Rs 4,000 crore every year from royalty coming from the allocated coal blocks.

At present, around 190 coal blocks have been allocated to various public and private companies with estimated reserves of 41 billion tonnes.

Government has identified about 70-75 coal blocks for captive use to private and public sector companies.

Find More Other News : Coal, Company, Exploration, Mine Trade & Market, Mineral Exploration, Mining Finance, Mining Investment, Mining Jobs, Mining Top News