₹12,000 Crore Coal Mine Investment Ignites NLC India's Share Price

NLC India has taken a significant leap forward by acquiring the Machhakata coal mine in Odisha, formalized through a Coal Mine Development and Production Agreement with the Ministry of Coal. This ₹12,000 crore investment, secured under a revenue-sharing model, is expected to commence production by 2030 and could potentially double NLC's lignite-cum-coal output.

Winning the Machhakata mine in the 8th round of auctions, NLC India is poised to enhance its annual coal production by 30 million tonnes, a substantial increase from last year's total coal and lignite production of 36.32 million tonnes. This acquisition marks a pivotal expansion for the company, originally a thermal power generator with captive lignite mines.

The stock market responded favorably, with NLC India's share price peaking at ₹302.60 and closing at a record ₹297.75. The company reported robust revenues of ₹8,363 crore from power sales and ₹7,902 crore from mining in the 2023-24 fiscal year, with mining operations yielding higher profits.

NLC India's coal production is set to rise significantly, with output from the Talabira mines expected to reach 16 million tonnes this year. Additionally, the North Dhadu coal mine, acquired last year, will produce 4-5 million tonnes annually, with all output sold on the open market.

Further strengthening its portfolio, NLC India's joint venture with Uttar Pradesh Rajya Vidyut Utpadan Nigam, holding a 51% stake, has secured the Pachwara South coal block in Jharkhand. With a production capacity of 9-10 million tonnes annually, this block will support the upcoming Ghatampur thermal power plant and surplus production will be sold.

News by Rahul Yelligetti