Utkal-E coal block likely to be operational by December 14: Nalco

State-owned aluminium major Nalco is expecting to operationalise its much delayed Utkal-E captive coal block by December next year.

Allocated to the company 9 years back, in August 2004, to meet coal requirements of four of its captive power plant, the block has failed to meet several deadlines for want of various clearances.

Even today, the stage-I forest clearance is pending due to issues related to forest rights on nearly 71 acres out of 488.53 acres of forest land required for the project.

"Activities for acquisition of government as well as private land, forest clearance, construction of R&R colony and appointment of MDO (mine-developer-operator) are at hand. The project is likely to become operational by December, 2014," National Aluminium Company Ltd (Nalco) said in its Annual Report for the last fiscal.

The company has already achieved most of the other milestones, including approval of mining plan, wildlife and environment clearances and Coal Ministry's permission for mining lease and had spent Rs 118.72 crore till March.

Besides, it has also obtained forest rights certificate for 417.87 acres in June 2010 itself and only two major issues are remaining -- forest rights issues related to nearly 71 acres and acquisition of 13.07 acres of private land.

Owing to the delays, the Coal Ministry had asked Nalco to furnish a bank guarantee of Rs 17.92 crore in February this year. The ministry had taken action while acting on the recommendations of an inter-ministerial group, which was constituted to review the progresses made by allocatees of various captive coal blocks.

The delays have also led to 21 per cent cost escalation for the project to Rs 338 crore (estimated at May, 2011 price level) from the previous estimates of Rs 280 crore.

In July, Mines Secretary R H Khwaja had written to Odisha Chief Secretary for expediting resolution of forest rights issues for the block, saying that due to this, stage-I forest clearance is pending and ultimately, operationalisation of the block is delayed.

The coal block, estimated to hold 67.49 million tonne reserves, is integral to Nalco's plans as it has already commissioned two out of four units of 120 MW each of its captive power plant and is running them by procuring coal either through e-auction or imports.

Nalco has plans to mine 2 million tonne coal from the block for over 30 years.