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Today, Naveen Jindal’s Jindal Steel and Power Ltd (JSPL) has estimated coal reserves of more than 2,300 million tonnes.
This is at a time when the country is facing severe coal shortages, especially to feed power plants.
All these coal blocks were allocated to Jindal’s company after the Congress-led UPA came to power. Till now, the Government has not auctioned coal blocks.
Ravi Uppal, Managing Director and Chief Executive Officer, JSPL, had recently told Business Line , “We are making sure that there is full access to raw materials in the long term.”
Sharp fall in stock
However, the situation turned gloomy on Tuesday.
The JSPL stock plunged to a 52-week low of Rs 202 this morning. The stock closed down 15.18 per cent at Rs 226.35 on the Bombay Stock Exchange on Tuesday.
Today’s fall of JSPL shares is the sharpest since January 21, 2008, and the company lost about Rs 3,787 crore in its market valuation, at Rs 21,159 crore.
The stock has dropped 50 per cent this year, compared with a 1.5 per cent decline in the benchmark BSE Sensex.
A few months back, Jindal tried to draw a picture at an industry conference on how difficult it is to explore a mine and bring it to production. There are no roads or infrastructure where the mines are located, he had said.
Overseas mines
Recently, in conversation with Business Line , a senior JSPL executive had said, “We want to give back all coal blocks to the Government. There is so much uncertainty. It is better to buy blocks in countries that have stable regimes and logistics support.”
JSPL has acquired exploration licences in Congo, South Africa, Mozambique, Madagascar, Zambia, Tanzania and Australia. Currently, it is scouting for more mines abroad.
There are also allegations that while JSPL used cheap coal from domestic blocks to fire its 1,000 MW power plant at Raigarh in Chhattisgarh, it sold electricity at higher rates in the spot market.
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