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   You are here :     Moneycontrol     MMB    General      Business Talk                         Most active discussions of 2006 , 2007 & 2008
Tatas, RIL bid for coal-to-oil blocks (1)   22-Jul-08 15:59Tracked by (0)  
Posted by:   latikav on ( 22-Jul-08 15:59 )
NEW DELHI: India’s largest private sector companies, including the Tata group and Reliance Industries, have applied for allocation of captive coal blocks for converting coal into liquid fuels such as petrol, diesel, naphtha, jet fuel and LPG.

The ministry has put on offer three coal blocks in Orissa with combined estimated reserves of six billion tonnes — one block with three billion tonnes, and the other two blocks with 1.5 billion tonnes each — for coal-to-liquid (CTL) projects.

The other applicants include Indiabulls, GMR, Videocon Industries and Indian Oil Corporation. Many other companies with experiences in mining sector, like steel and power producers, are also learnt to have applied.

Reliance Industries had earlier proposed an $8 billion investment plan to the government to establish a CTL project and sought coal mines with reserves of about 1.5 billion tonnes for it. It had said the plant will have a capacity to produce 80,000 barrels of oil a day.

South Africa’s Sasol, the world’s largest producer of liquid fuels from coal, had also evinced interest in establishing $8 billion CTL project in India in collaboration with the Tata group to produce about 80,000 barrels of oil per day, and had asked for similar coal mines.

An inter-ministerial group, with representations from the Planning Commission, ministries of finance, coal, commerce, petroleum and natural gas, and others, is now expected to examine the proposals.

Earlier last month, the coal ministry had invited applications for allocation of captive coal blocks for CTL projects, and had asked the companies that had earlier made unsolicited applications to apply afresh.

The company that is allocated the block with three billion tonnes reserves, however, will be allowed mining only up to 1.5 billion tonnes of coal in line with the requirements of such projects. The remaining coal would be later used for other purposes.

A 1.5-billion tonne coal blockcluster of blocks “should enable mining operations of 28-31 million tonnes of run-of-mine coal per annum for 30 years”, the ministry had earlier said on its website.

Both, Reliance and Tatas, are learnt to have applied for allocation of all the three blocks on offer.

Coal liquefaction and underground coal gasification were allowed as permissible end-
uses for allocation of captive blocks in August last year.

The coal ministry had asked for a minimum net worth of Rs 4,000 crore and details of collaborations or tie-ups with technology providers to be eligible, saying that the CTL projects require huge investments and that the technology for such projects may not be indigenously available.

The minimum eligibility criteria fixed by the government would ensure that only serious players are allowed to enter the business, following the similar model like the one seen for big projects like ultra mega power projects.

Though coal liquefaction releases very high amount of carbon dioxide, raising concerns on global warming, it can potentially limit the escalation of oil prices.

DNA

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