Adani Power forays into captive mining, gets green light to start mining at Dhirauli

Adani Power said on Tuesday that it has received approval from the Ministry of Coal to begin mining operations at the Dhirauli mine in the Singrauli district of Madhya Pradesh. The Dhiaruli block is of strategic importance to the company, as it is expected to fulfil its merchant power requirements and also supply the nearby 1,200-megawatt Mahan power plant, which is undergoing a 3,200-megawatt expansion.

The Dhirauli mine is going to be Adani Power’s first captive mine to receive a ministerial nod to start mining operations. Captive mines are the kind of mines that enable companies to exclusively use the coal produced from the mine for their own processing or end-use. This could include use for a steel plant or a power plant, for instance.

Mahan Energen Limited, a subsidiary of Adani Power, owns the Dhirauli Mine. It has a peak production capacity of 6.5 million tonnes per annum, including five tonnes from open-cast mining and the remainder from underground operations. Adani Power cites a geological study, which found that the block at Dhirauli has a gross geological reserve of 620 MMT and a net geological reserve of 558 MMT.

“By integrating backwards into raw material sourcing, we are not only optimising input costs but also enabling ourselves to deliver competitively priced power for millions of consumers,” said SB Khyalia, CEO, Adani Power, in a statement. The open-cast peak rated capacity (PRC) at the Dhirauli mine is targeted for FY27, with underground mining scheduled to commence nine years later. Adani Power holds a 30-year lease for the block in Dhirauli.

The company also said that it might wash and process the mined coal within the mining area. This would ensure that impurities and inert materials are not carried beyond the mining area, thereby making emissions benign.

Coal production from captive and commercial mines in August was recorded at 14.43 million tonnes, while dispatches reached 15.07 million tonnes, according to a press release by the Ministry of Coal earlier. This corresponds to an 11.88% rise in production and dispatches increasing by 9.12% year-on-year.

According to the ministry, the rise in production and dispatches was due to a series of strategic policy measures, rigorous monitoring, and consistent support for stakeholders. “These efforts have played a crucial role in accelerating operational approvals and expanding production capabilities, thereby driving overall growth in coal output and dispatches,” the ministry added. The ministry also reiterated its dedication to fully realise the potential of captive and commercial coal mining in India.

Last month, Adani Power received a letter of intent from Bihar State Power Generation Company Limited to develop and operate a 2,400 MW greenfield thermal power plant at Pirpainti in Bhagalpur district, Bihar. The company announced last month that the project will supply 2,274 MW of electricity to the state’s power distribution companies under a long-term agreement.

The Adani Group subsidiary emerged as the lowest bidder in a competitive tender process, quoting a final tariff of ₹6.075 per kilowatt-hour. The power will be supplied to North Bihar Power Distribution Company Limited and South Bihar Power Distribution Company Limited.