Govt deallocates 10 captive coal blocks

Written by fe Bureau | New Delhi | Updated: Feb 18 2014, 10:31am hrs
The government on Monday moved to cancel 10 coal blocks allocated to 18 companies, including Adani Power, Jindal Steel and Power, Rungta Mines and a joint venture between the Tatas and South African firm Sasol, acting on the recommendations of an inter-ministerial group (IMG).

Recommendations of the IMG have been considered and accepted by the competent authority. The coal block allocated to your company is de-allocated forthwith. Your company shall not be eligible for allocation of coal block in lieu of the de-allocated block, the coal ministry said in cancellation letters issued to the companies.

The cancelled blocks include two coal-to-liquid (CTL) blocks Ramchandi Promotional allocated to JSPL and North of Arkhapal-Srirampur held by Strategic Energy Technology Systems (SETSPL), a joint venture between a consortium of Tata Group companies and South African energy major Sasol.

Sources said that more letters would be issued, as recommended by the IMG.

The Ramchandi Promotional block has estimated reserves of 1,500 million tonnes. It was allocated to JSPL in 2009 and was meant to feed the companys R77,450-crore CTL project in Odisha. JSPL had earlier requested the petroleum ministry to forward the project proposal to the Cabinet Committee on Investment (CCI). SETSPL had also sought the Centres intervention for taking up its R66,000 crore CTL venture with the CCI.

On January 15, the coal ministry had served a three-week ultimatum to the companies sitting on the 61 blocks where mining leases were not executed to furnish proof of the requisite clearances obtained by them to operationalise their captive mines.

As is known, the IMG, which has been tasked with suggesting punitive measures for holders idling on their captive coal blocks has recommended cancellation of nearly 30 mines, making it the single biggest de-allocation so far.

Apart from the companies mentioned above, which lost their mines on Monday, names of companies like Essar Power and Reliance Infrastructure holding captive blocks also figure in the list.

Among the blocks learnt to have been recommended for cancellation by the panel for cancellation include Gare Palma IV/6 of JSPL, Rampia and Dipside of Rampia blocks in Odisha allocated jointly to Reliance Infrastructure, Lanco, Sterlite Energy, GMR Energy, Arcelor Mittal India and Navabharat Power and Essar Powers Chakla and Ashok Karkatta blocks in Jharkhand.

The panel has also recommended cancellation of Radhikapur East block allocated to a consortium of companies led by Tata Sponge, the Moira Madhujore mine allotted to a consortium of six firms including steel maker Uttam Galva. The Madanpur North mine belonging to seven firms including Sunflag Iron and Steel would be cancelled and so too the Madanpur South Mine held by a consortium of six firms, including Hindustan Zinc.

Details of these 61 blocks were furnished last month to the Supreme Court, which has been highly critical of the entire allocation process executed by the coal ministry through the erstwhile screening committee route. According to coal ministry officials, the companies have furnished whatever documents they had, but those were not enough to escape cancellation in most cases.