Coal blocks auction is death knell for Singareni, says Vinod Kumar

Vinod Kumar said this move would result in closure of open cast or underground mines due to exhaustion of reserves in the operating mines during the next five to 10 years

Hyderabad: Condemning the BJP-led union government’s decision to auction coal blocks under the Singareni Collieries Company Limited (SCCL), Telangana Planning Board Vice Chairman B Vinod Kumar said the move would sound the death knell on the company.

The adverse effect of not allotting the blocks to SCCL on nomination basis within the Godavari Valley Coal Field (GVCF) outside existing mining lease areas would lead to short supply of coal to thermal power stations existing in South India and some parts of Northern India. This would also result in closure of open cast or underground mines due to exhaustion of reserves in the operating mines during the next five to 10 years, he said, adding that as a result, the annual production capacity would be decreased year by year, besides underutilization of huge infrastructure established for dealing with the existing annual production capacity of 70 to 80 Million Tonnes Per Annum.

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In a statement on Sunday, Vinod Kumar said the cost of production per tonne would also increase and the annual turnover and profits would decline. Eventually, the company will land in financial losses. More importantly, the manpower requirement in the company would be reduced, leading to social impact in the neighbouring areas, he said.

Explaining the impact of privatizing coal blocks in GVCF, he said under the present circumstances, operation of opencast projects was viable economically. On the contrary, underground mining was not economically viable though environmental friendly. Due to higher proportion of production about 85 per cent from open cast projects, SCCL was making profits by offsetting the losses incurred in underground mines, he pointed out.

Within the available mining lease areas of GVCF, amenable coal blocks were not available for taking up opencast mining projects, which can be operated up to a depth range of 350 m to 400 m with a stripping ratio of 1:15 to 1: 17 with a provision of additional price from customers. However, SCCL has been converting or amalgamating the closed underground mines wherever feasible for extraction of leftover or blocked reserves after underground mining, which will sustain for another 10 years, he said.

“Considering all these factors, SCCL needs a minimum of four to five open cast blocks within GVCF outside existing mining lease and two to three blocks outside Telangana to sustain the annual production capacity” Vinod Kumar said.

Lashing out at the BJP government for putting the coal blocks in SCCL limits to auction, he charged that it was a conspiracy to weaken the Singareni and strategically privatise the company.

“What do the Prime Minister and BJP State president Bandi Sanjay have to say about this auction?” he asked, stating that if BJP leaders here were committed to Telangana’s welfare and development, pressure should be exerted on the Central government to desist from such conspiracies.