India's largest power company, NTPC Ltd., has invited bids to operationalise its Badam coal block with a rated capacity of 3 million tonnes (mnt) under the mine-developer-operator (MDO) mode.

The appointment of MDO refers to the engagement of external agencies which would execute mine development by contributing advanced technology and operational efficiency on behalf of the mine owner.

NTPC mainly procures coal from domestic miners, Coal India Ltd. (CIL) and Singareni Collieries Company Ltd., via long-term fuel supply agreements (FSAs) to run its thermal power plants. Besides, part of its domestic requirement is met through captive blocks allocated by the government.

In particular, the Badam block, located in Jharkhand, was transferred to NTPC in September 2019. It was initially with the Bihar State Power Generation Company (BSPGCL) and was later allotted to NTPC after it acquired the Barauni thermal plant from BSPGCL in December 2018.

The MDO is required to carry out project development which broadly involves designing, financing and carrying out construction work at the site. In addition, operation and maintenance of the block for excavation and delivery of coal also fall within the scope of the tender.

The successful bidder will be selected via a single stage two-part bidding process, for which the tentative date for bid submission is 1 May, 2023.

NTPC's coal production crosses 20 mnt

At present, NTPC has seven coal blocks i.e. Pakri Barwadih, Chatti Bariatu, Kerandari, Dulanga, Talaipalli, Badam and Banhardih. Among these, coal production has already started at Pakri Barwadih, Dulanga, Talaipalli and Chatti Bariatu blocks.

The company is progressively increasing coal production from these blocks in order to ensure fuel security.

In February, NTPC's captive coal production rose 80% y-o-y to 2.6 mnt. On a cumulative basis, the company's coal production has crossed 20 mnt in the ongoing fiscal (FY23).