Power major NTPC Ltd, India's largest generating company, plans to spend about Rs 550 crore as initial investment for developing eight coal blocks with a view to begin production from 2008.
The state-run generating company would also shortly select a mine developer-cum-operator for its first coal block at Pakhri Barwadih in Jharkhand, company sources said.
NTPC's Board of Directors have already approved the advance expenditure on the eight blocks, which have total mineable reserves of 2.9 billion tonnes, sources said.
The company is targeting a total production capacity of 50 million tonnes per year by 2017 as part of efforts to mitigate fuel shortages at its generation plants.
Besides developing coal mines as a long-term measure, NTPC is importing coal as a contingency measure in the short term, while negotiating with coal companies to increase supplies.
The public sector firm, which requires about 100 million tonnes of coal every year, has mandated the State Trading Corporation to import five million tonnes of coal in 2006-07.
The official said coal stock position so far this fiscal has improved, with the company receiving about 27 million tonnes of the fuel during the April-June quarter as against 25 million tonnes in the corresponding period of 2005-06.
NTPC is also in the final stages of talks with Coal India Ltd to form a 50:50 joint venture for developing Brahmini (Jharkhand) and Chichro Patsimal (Orissa) coal blocks.
The Brahimini block has reserves of 1.9 billion tonnes, while Patsimal has 356 million tonnes.
The other blocks are Kerandari (229 MT) and Chatti Bariatu (243 MT) in Jharkhand; Chhatrasal (150 MT) in Uttar Pradesh and Dulanga (260 MT) in Orissa. NTPC has also been allocated Talaipalli block for its 4,000 MW Lara project in Chhattisgarh.