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Coal blocks of major power producers to face the axe

Headed by additional secretary, coal, AK Dubey, the panel would meet for two days beginning Friday to decide on the fate of the 61 blocks.

New Delhi |
February 7, 2014 1:54:07 am

Hindalco’s Mahan coal block, along with some blocks of Tata Steel, Jindal Steel and Power and Reliance Power could be cancelled by an inter-ministerial group, which will meet on Friday. The cancellations would figure as part of the list of 61 blocks that were allocated to companies between 2005 and 2008.
Significantly, the cancellation for Mahan, if it happens, would be after it has got a go-ahead from the ministry of environment and forests recently. Aditya Birla Group company Hindalco and Ruia’s Essar have plans to develop the block jointly.

The inter-ministerial panel is expected to cancel allotments of Tata Steel’s Kotre Basantpur, Pachmo and Ganeshpur blocks, while the fate of JSPL’s Jitpur, Gare Palma IV/6 and Utkal B1 mines would also be decided, government officials indicated.  The panel is hurrying  because a Supreme Court-set deadline expired on  Wednesday.

Headed by additional secretary, coal, AK Dubey, the panel would meet for two days beginning Friday to decide on the fate of the 61 blocks. The details of these blocks have been furnished to the apex court, which has been highly critical of the entire allocation process executed by the coal ministry through the erstwhile screening committee procedure. According to coal ministry insiders, the companies have furnished whatever documents they had, but those are not enough to escape the guillotine in most cases.

The ministry is likely to take a tough stand on mines where there is prima facie evidence of delays. According to a source, out of 61 blocks, nearly 25 will be immediately blanked out. Facing flak over alleged irregularities and criminal conspiracy in allocations of coal blocks since 1993, which is being currently investigated by the Central Bureau of Investigation, the government, through Attorney General G E Vahanvati, had conveyed to the Supreme Court last month that the allottees of these 61 blocks would be given time till February 5 to furnish proofs of the requisite clearances secured to operationlise their mines, failing which they would be canceled.

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The axing of the approvals is likely to further muddle the prospects for the sector which has forced India to import a massive 135 million tonnes of coal in FY14 despite possessing the third highest reserves of the mineral in the world.   Hindalco and Tata Power’s jointly-owned Tubed block and JSW Steel’s Rohne mine may also be among those whose fate would be decided within the next 48 hours. Essar Power’s Chakla and Ashok Karkatta blocks, too, are on the IMG’s radar.

The panel would also discuss the fate of Seregarha block allocated to steel tycoon LN Mittal’s India arm along with GVK. The Durgapur II/Tarimar mine allocated to Vedanta group firm Balco may be de-allocated. Among other vulnerable blocks are, Radhikapur East allotted to Tata Sponge Iron and other companies, Rampia and Dipside of Rampia block jointly allocated to Sterlite Energy, GMR Energy, ArcelorMittal, Lanco, Navbharat Power and Reliance Energy.

A clear indication to this effect was visible last month, when the ministry said mines where environmental clearance and Stage-1 forest clearance have not been obtained and those where prospecting licences have not been secured would be canceled. In November 22, the IMG had cancelled eleven allocations.

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