Charges-hit Prakash Inds in new mining plan at Chotia

New Delhi-based sponge iron player Prakash Industries might submit a new mining plan for its Chotia coal block in Chhattisgarh, to enhance capacity.

The company recently got embroiled in a controversy over Chotia, where it has been accused of illegally mining and selling coal to third parties.

Vipul Agarwal, director-finance, said the company is currently mining 1 million tonne of coal from the block, which is being used for its sponge iron plant in Champa, Chhattisgarh, having a capacity of 0.6 million tonnes per annum (mtpa).

“The left-out middlings of coal from the plant are being used for captive power generation,” Agarwal said on Wednesday, while speaking to analysts on a conference call.

Agarwal said the company has been allotted three coal blocks — Chotia, Fatehpur and Madanpur.

While Chotia was allotted in 2003 to feed a 0.8 mtpa of sponge iron capacity at Champa, the other blocks were for the company’s foray into power generation.

Madanpur has been placed under a ‘no-go’ zone by the Union ministry of environment and forests.  Agarwal said if Madanpur stays that way, the company may have to seek a nod to up extraction at Chotia.

He said it would take another 2-4 months to get clarity on the status of the Madanpur block. “Beyond that, it would take 5-6 months to get a new mining plan approved,” he said.

Denying allegations of illegal mining from Chotia, Agarwal said the company has been operating the block for the last four years. “The extraction of coal, its quantity, grade and usage are being verified every year by the office of the coal controller and barring a few discrepancies of loss of coal due to transportation, there have been no reports of illegal mining from the government body,” he said.

Prakash Industries plans to enhance its sponge iron capacity from 0.6 mtpa to 1.2 mtpa by 2013.

It has a waste heat power generation capacity of 75 mw and another 100 mw of coal-based capacity at Chhattisgarh, which is being expanded to 775 mw by 2015, with the first unit being commissioned by the last quarter of the current fiscal. Hence, coal becomes very critical feedstock for the company’s future growth, Agarwal said.

The company’s current coal requirement is between 1.2 mtpa and 1.3 mtpa, of which 1 mtpa comes from Chotia. Around 10-15,000 tonnes is bought under the e-auction route and the remaining comes from linkages from external sources.

Chotia has reserves of close to 50 million tonnes of coal.