BS reported that Has Hindalco Industries lease for Odisha’s only operational private coal mine been a bonanza or a carefully husbanded and now depleting asset?
According to the state mining department, the company has so far excavated about 16 million tonnes from this one at Talabira in this district. If the calculation of operating margin at INR 295.41 per tonne of coal indicated in the report of the country’s Comptroller and Auditor General is taken as reference, Hindalco made a financial gain of INR 466 crore.
Mr Subir Mukhopadhyay head, human resources and spokesperson of Hindalco’ s Hirakud aluminium smelter unit with an installed capacity of 161,000 tonnes of aluminium annually said that however, the bonanza if it is one is set for an early end. We had started mining at Talabira in 2003 and the residual deposits will cater to our need for the next three to 4 years only.
Mr Mukhopadhyay said that “It is a very small coal mine spread over 1.7 acres and has only 28 MT of proven reserves. We’re really worried on how to supply 7,000 tonnes of coal per day to our captive power plant at Hirakud about 50 kilometers from the mine after 2015 to 2016. Though we have stakes in other coal mines production at those sites are yet to take off.”
The state mining department confirms the estimate, saying Hindalco’s annual requirement is 3 MT. Electricity is 40% of the cost of making aluminium. Talabira was originally allotted to Indian Aluminium Company in 1994 and later to Hindalco when it acquired majority stake in the former in 2000. For the first three years after start of operations at Talabira, it was producing 500,000 tonnes of coal annually. Later, its mining plan was revised to 1.5 MT per annum then in 2010, the Union ministry of environment and forests permitted it to raise annual production to 3 MT.
Mr Mukhopadhyay said that “We cannot think of trading coal since we are struggling to meet our requirement. It would be foolish to sell coal at a time when we are actually importing coal to meet our need. The company imported 40,000 tonnes to 45,000 tonnes in both 2010 to 2011 and 2011 to 2012 to feed the Hirakud power plant because of the supply problem in the captive mine. The requirement was expected to grow as the company plans to step up power generation by 100 MW to meet the need of capacity addition on flat rolled aluminium products.
Mr Dwarika Mohan Mishra trade union leader who had made the complaint about the company selling coal in the open market in a letter to the state chief secretary said that Hindalco earned much more than INR 466 crore profit in the past nine years of mine operation. Since the auditors had based their calculations on the production cost during 2010 to 2011 of Coal India Limited which spends a lot on manpower and other facilities not applicable to private miners the profit figure may be more.
Source - Business Standard.com
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