Kolkata, Mar 2 (PTI) Coal India arm NCL will soon commence its Rs 24,000-crore rehabilitation and resettlement (R&R) project to relocate from Morwa township in Madhya Pradesh's Singrauli, a top company official said on Sunday.

The relocation, under the ‘Singrauli Punarasthapan’ project, will involve shifting around 50,000 people and 22,500 houses from the township spread across 927 hectares. Singrauli sits atop around 600 million tonnes of mineable coal.

"This is a huge project estimated at Rs 24,000 crore. We are in the advanced stages of negotiations with all four residents' associations regarding benefits and relaxations in documentation requirements. The good thing is that people have agreed to relocate," Northern Coalfields Ltd (NCL) Chairman and Managing Director B Sairam told PTI.

The township's relocation was necessitated as NCL's Jayant coal mine is expanding and expected to come within 500 metres of the residential area in the next two years, which would hinder mining operations, he said.

"We have to put our money initially, and then recover it through the additional charge that begins from May, and that will continue," Sairam said.

At present, NCL is working to iron out issues related to land acquisition, which will cost around Rs 4,000 crore.

To recover the R&R expenditure, NCL will levy an additional charge of Rs 300 per tonne on coal sales starting May, which is expected to generate around Rs 4,200 crore annually from its estimated 140 million tonnes of production from the 2026-27 fiscal.

However, in FY'26, the cost recovery is projected to be around Rs 3,900 crore, he said.

NCL aims to start handing out the first compensation cheques from May, with the first phase involving the vacation of 572.5 hectares of tenancy land.

The project also covers 205.8 hectares of forest land and 149.3 hectares of government land.

The company is planning to ramp up the capacity of the Jayant coal mine from 30 million tonnes per annum (MTPA) to 35 MTPA by 2026-27.

At least two NTPC power plants in Madhya Pradesh, with a combined installed capacity of 6,500 MW, are dependent on NCL's coal supplies.

NCL's capital expenditure for the current fiscal is pegged at Rs 2,500-2,600 crore, but it is expected to rise to Rs 4,000-5,000 crore in the next fiscal due to the R&R activities, with a significant portion earmarked for land compensation, Sairam said.

In 2024-25, coal production is estimated at 139 million tonnes and 140 million tonnes in the next financial year.

Brokerages have welcomed the cost recovery mechanism, stating that it will help Coal India protect its bottomline amid the massive relocation expenses. PTI BSM RBT

Cost recovery mechanism: additional per-tonne coal charge to fund rehabilitation and resettlement for mine expansion. NCL will fund upfront rehabilitation and resettlement for relocating Morwa township residents due to mine expansion, then recover those R&R expenditures by levying an additional per-tonne charge on coal sales starting in May; this charge is intended to generate recurring revenue tied to projected production, enabling initial compensation disbursements and supporting the company's increased capital expenditure and mine capacity expansion.