Bhubaneswar, Aug 21 (IANS): The union coal ministry has permitted the National Aluminium Company Limited (NALCO) to mine a coal block in Orissa, the state-run undertaking said Sunday.

The allocation was made for NALCO's Utkal coal block at Angul, about 161 km from here, the company said in a statement.

The block covers an area of around 212 hectares and has an estimated coal reserve of 70 million tonnes.

The coal is meant for two units of NALCO's Angul plant, which supplies power to the company's aluminium smelter located nearby. The two units of 120 MW each, commissioned in 2009 and 2010, have been operating till now WITH coal procured by the company through expensive e-auctions and imports.

The mining lease deed will soon be signed between the state government and NALCO.

Mining will be carried out after obtaining permission from the state forest department, the statement said.

The Bhubaneswar headquartered NALCO is India's third largest producer of aluminum.