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Western Coalfields Limited (WCL), which at present operates in Maharashtra and Madhya Pradesh, has also been allotted four blocks in Odisha. The move is expected to bring the company out of the red. This is the first subsidiary of Coal India Limited (CIL) to have got coal blocks away from its regular area of operations.
Difficult mining conditions in the present area under WCL have been a major factor in hampering the company’s profitability. The mineral is deep-seated in the areas. This means to get one tonne of coal, WCL has to dig out almost 9 tonnes of earth. This shrinks the margins. The management had been demanding blocks in other states where mining is easier. The company has over 75 mines in Maharashtra and Madhya Pradesh.
Recently, it was decided to offer four blocks to WCL. The mines are located in the Ib valley coalfield area of Odisha. Mahanadi Coalfields Limited (MCL), another subsidiary of CIL, is already operating in the state.
WCL sees a major advantage in getting the new mines. Here, the stripping ratio is around 1:2 or even less. This means one tonne of coal can be extracted by digging out 2 tonnes of coal, said sources.
WCL plans to take its production from the four mines to 50 million tonnes in three years. This means out of the four blocks the company plans to extract as much coal as it does from the 75 mines under its possession at present.
Sources said the production is expected to start in a year. The lower stripping ratio is expected to increase the company’s profitability too.
Mahagenco, the state government-owned power generation company, is the major client of WCL. Mahagenco also sources part of its coal from Odisha, which will now happen from WCL, said sources. The company also expects to create nearly 10,000 new jobs from the new blocks.
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