Odisha Halts Operations at Six Coal India Mines

Any production disruption at state-run Coal India, which has repeatedly fallen short of supply targets, would mean higher dependence on imports as Asia's third-largest economy struggles to meet domestic demand.

Coal accounts for 66 percent of India's thermal power generation, the cheapest source of electricity in the country, which sits on the world's fifth-largest coal reserves.

Operations were halted on Saturday at Coal India's Lajkura open caste mine and the Orient group of mines at Ib-valley Coal fields in Jharsuguda district, that belong to Mahanadi Coalfields Ltd (MCL), an unit of Coal India.

"They do not have the forest clearances. The mines will remain shut until they get the approval," Odisha's director of mines Deepak Kumar Mohanty told Reuters.

State authorities asked the unit to halt operations earlier this year but the mines were given a temporary reprieve by the Supreme Court, Mohanty said.

The concession period has expired and the company has been told to shut the operations, he said.

"We have already submitted the application and completed all the formalities," A.K. Singh, technical and project director at MCL told Reuters.

The MCL unit expects to produce about 112 million tonnes in the current financial year. In 2011/12, it produced about 104 million tonnes.

The mines whose operations were suspended were producing about 3 per cent of MCL's daily output of 300,000 tonnes, he said.

Coal India is expected to supply 470 million tonnes in the current fiscal year to end-March 2013, compared with India's total estimated supply of 580 million tonnes.

That supply is seen falling short of demand by 192 million tonnes, the coal ministry has said.