Companies

Govt to take back coal blocks allotted to 50 companies

Our Bureau New Delhi | Updated on March 12, 2018 Published on February 18, 2014

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Says green clearances not obtained; firms with big investments will be affected most

The Government has decided to take back coal mines awarded to some 50 companies, including Adani Power, JSPL, Tata Group, Rungta Mines, Arcelor Mittal, Lanco, Hindalco and GMR.

This could spell big trouble for companies that have invested in end-use projects, as they will now be left without a fuel source.

According to the Government, blocks that were not able to achieve the requisite milestones have been de-allocated.

The inter-ministerial screening committee had asked the captive mine owners to update their status. “In the review, it came to light that the Ministry of Environment and Forests has not received proposals seeking Stage-I forest clearance,” said a Coal Ministry official.

Big investments

In some blocks, such as Fatehpur, allocated to SKS Ispat and Power and Prakash Industries, the Power Ministry pointed out that SKS Ispat had invested ₹2,486 crore in its end-use plant.

The Rampia block, allocated to Sterlite Energy, GMR Energy, Arcelor Mittal, Lanco Group, Navbharat Power and Reliance Energy, is in a similar situation. Here, Sterlite has invested ₹8,287 crore, GMR, ₹5,600 crore, and Lanco, ₹4,800 crore to set up end-use plants. The Sterlite and GMR plants have been commissioned.

“The entire issue of de-allocation seems headed for legal battles. Many companies that have invested in end-use projects or in coal blocks, and where delays were not on their account, may move the courts. There is uncertainty in coal supplies for end-use projects and it will surely persist,” said Dipesh Dipu, Partner at Hyderabad-based Jenissi Management Consultants.

He added that fixing the responsibility for delays in mine development is difficult as several approval processes are not objective and transparent.

The Government’s move follows Attorney-General Goolam E Vahanvati informing the Supreme Court last month that nearly 41 coal blocks allocated to private companies would be taken back if they did not obtain environmental clearances within six weeks.

The inter-ministerial group will meet again on February 25 to consider stage-II forest clearances of other blocks.

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Published on February 18, 2014
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