ArcelorMittal: Voluntarily surrendered stakes in 2 coal blocks

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ArcelorMittal had informed the government about its decision to surrender stakes in the two blocks and was waiting for consent/approval of the Coal Ministry. (Lakshmi Mittal photo by Reuters) ArcelorMittal had informed the government about its decision to surrender stakes in the two blocks and was waiting for consent/approval of the Coal Ministry. (Lakshmi Mittal photo by Reuters)
SummaryArcelorMittal said it has voluntarily surrendered its stakes in 2 coal blocks, Rampia and Dip side of Rampia...

ArcelorMittal today said it has voluntarily surrendered its stakes in 2 coal blocks, Rampia and Dip side of Rampia, following its decision to exit from the USD 12 billion steel project in Odisha in July last year.

Accordingly, ArcelorMittal had informed the government about its decision to surrender stakes in the two blocks and was waiting for consent/approval of the Coal Ministry since then, it said in a statement.

On Monday, the government had decided to deallocate the two blocks but the decision was kept on hold due to a case being heard in the Delhi High Court on the matter.

The case has been filed by Rampia Coal Mine and Energy Private Ltd, the joint venture of 6 allottee firms -- Sterlite Energy, GMR Energy, Lanco group, ArcelorMittal, Navbharat Power Pvt Ltd and Reliance Energy.

"In July 2013 ArcelorMittal revisited its industrial plan inter-alia due to delay in grant of prospecting licence for the coal block and decided not to pursue with its Odisha project and voluntarily surrendered its stake in Rampia.

"Accordingly, a communication was sent to the Ministry of Coal (MoC). We now await for MoC's consent/approval in this regard," the statement of ArcelorMittal said.

A company spokesperson, when asked, clarified that consent and approval of the Coal Ministry is awaited since July, 2013, when ArcelorMittal had announced its exit from the Odisha steel mill project. The government was informed then itself about company surrendering its stakes in the two blocks, he said.

The two coal blocks, Rampia and Dipside of Rampia, were allocated in January, 2008 to the 6 firms. For ArcelorMittal, coal from the block was meant for its captive power plant, which was to be constructed for supplying electricity to its 12 million tonnes steel plant in Odisha.

For others, coal was to be used for their respective independent power plants.

As per the government's letter to the 6 firms, the deallocation was done on the grounds that allottees have not yet secured prospecting licence though the block is partly explored. In-principle forest clearance and environment clearance have not been obtained as well.

The government, however, had noted that Sterlite Energy and GMR have invested about Rs 8,287 crore and Rs 5,600 crore respectively on their end-use power plants, which have been commissioned as well. Besides, Lanco group has also made Rs 4,800 crore investment so far on its end-use power plant.

It had also

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