India's biggest lignite miner, Neyveli Lignite Corporation Ltd. (NLC) has unveiled extensive plans for investing up to Rs40,000 crore ($8.3 billion) during the eleventh (2007-2012) and twelfth (2012-2017) five year plans to expand its mining and power generation capacities to supplement to the growing demand for power in the country.

On materialisation of its ambitious new ventures and expansion programmes spread over various parts of the country with foray into new technological areas, the company aims to triple its mining capacity to 79.7 million tonnes per annum (MTPA) from the current level of 24 MTPA, and increase the power generation capacity six-fold to 14,740 MW from the present 2,490 MW.

The company plans to fund the new projects through internal accruals and borrowings.

NLC announced its results for 2008-09 which showed an increase of 12.5 per cent in turnover at 3354.91 crore against the 2981.65 crore last year. However, the net profit dropped to Rs821.09 crore or 25.5 per cent compared to 1101.57 crore for 2007-08. The company's board has recommended a dividend of Rs2 per share for 2008-09.

On the company's performance, NLC chairman and managing director A R Ansari told in Chennai on Saturday: "We closed the year on a positive note considering the problems we faced. The unprecedented rains in Tamil Nadu affected lignite production causing a generation loss of Rs 293 crore. We also faced many strikes by contract workmen. Still, we achieved the highest ever power generation in the fourth quarter and our growth momentum has now picked up".

NLC is a ''Mini Ratna'' public sector company engaged in lignite mining and power generation. Lignite, popularly known as ''brown coal'' is the lowest rank of coal which is used primarily as fuel for power generation. The company operates three state-of-the-art lignite mines with a capacity of around 24 MTPA and three thermal power plants of 2,490 MW in Neyveli, Tamil Nadu.

Its ongoing projects include expansion of the mine capacity by 4.5 MTPA and power plant by 500 MW at Neyveli apart from a new 2.1 MTPA lignite mine and 250 MW power plant in Barsingsar, Rajasthan. On completion of these projects by 2010, NLC will achieve a mine capacity of 30.6 MTPA and 3240 MW of power.

It has also commenced work on a coal-based 1,000 MW power plant jointly with Tamil Nadu Electricity Board (TNEB). The project will be implemented by Neyveli Tamil Nadu Power Ltd (TNPL) at a cost of 4909 crore and scheduled to be completed  by 2012-13.

Future plans include a number of power projects using lignite as fuel in Bithnok and Hadla in Rajasthan, and Jayamkondam and Neyveli in Tamil Nadu, Valia in Gujarat, and coal-based plants in Orissa, Madhya Pradesh, Jharkand and Uttar Pradesh.

The company plans to foray into areas of wind energy and hydro power as well. The first wind-based power plant of 50 MW will be set up near Tuticorin in Tamil Nadu which will be further raised to 200 MW. Discussions are underway with Uttarakhand government to set up a 1,000 MW hydro power unit in Uttrakhand.

NLC intends to venture into nuclear power sector in the near future.

The company said that it would participate in tariff-based competitive bidding to take up ultra mega power projects jointly with equipment manufacturer Bharat Heavy Electricals Ltd. (BHEL).

NLC is in the process of forming a shell company, NLC Videsh Ltd., for acquiring coal resources abroad, mainly in South Africa and Indonesia.

Regarding a possible divestment, Ansari said: "We are yet to receive any communication on this. It's a government decision, which could be taken any time and the company's board cannot take the decision.''

Analysts contemplate that the government may disinvest part of its 93.56 per cent holding to the public which could fetch over Rs1900 crore in case of a 10 per cent sell off, at current market prices.

NLC shares closed at Rs121.45, 1.42 per cent higher on Friday on the Bombay Stock Exchange.