A consortium of private power producers is faced with legal issues in mining coal from the captive block that has been allotted to it. The problem is that land in the coal blocks cannot be transferred to any other user.

Coal India had acquired them under the Coal Bearing Areas (Acquisition and Development) Act 1957, that forbids transferring the land to others.

The consortium includes Sterlite Energy, GMR Energy and Lanco, which have either set up power plants or are in the process of doing so.

Joint venture

In January 2008, the Coal Ministry awarded two contiguous coal assets ‘Rampia’ and ‘Dip-side of Rampia’ in the mineral-rich Sundergarh district of Odisha to a consortium of six captive users.

Apart from Sterlite Energy, GMR Energy and Lanco, the other consortium members included Reliance Energy (now renamed Reliance Infra) for two proposed power plants, Arcelor Mittal, for a planned steel unit, and Navbharat Power. Together, the blocks are estimated to have reserves of 112 million tonnes of coal. The consortium has formed a joint venture Rampia Coal Mine and Energy Private Limited to extract the reserves.

While RCMEPL officials are tight-lipped about the development, CIL sources told Business Line that the company has no legal right to allow the captive block awardees to explore coal in the area owned by the company through the CBA Act.

Legal tangle

“The joint venture requested us for permission to conduct exploratory studies in the block. However, we have expressed our helplessness in this regard, until and unless we receive approval from the Union Government,” said a company source.

To add to the problem, the Coal Ministry is yet to suggest a solution. It had already held three meetings comprising representatives from both sides without much success.

The reason is simple: unless the CBA is amended — as was proposed by CIL in 2008, to help it return to society nearly 30,000 hectares of mined and reclaimed land — the land use right cannot be transferred.

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