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In a major blow to Naveen Jindal-promoted Jindal Steel and Power Ltd, the Coal Ministry has set up a probe panel to review the status of its mines allocated to the company in Chhattisgarh.
This is a fallout of complaints received by the Government that the private sector steel and power producer is selling coal to third parties at higher price. These mines are allocated to the company only for captive use.
“The inter-ministerial probe team is headed by an advisor in the Coal Ministry. There are representatives from the steel and power ministries,” a senior Government official told Business Line .
JSPL has been allocated four coal blocks in Chhattisgarh - Gare Palma IV/1 (1996), Gare Palma IV/2 (1998), Gare Palma IV/3 (1998) and Gare Palma IV/6 (2006). Of this, the first three mines are under production. These blocks have estimated reserves of more than 450 million tonnes.
A different interministerial group that reviews status of coal blocks has already recommended issuing of show cause notice to JSPL for not able to develop Gare Palma IV/6 as per laid milestones.
According to the Coal Mines (Nationalisation) Act, 1973 that oversees captive mining, all coal mined from the block must be used entirely for the respective end-use project.
JSPL has denied any diversion of coal from its captive mines.
“The coal from all our captive mines is used in respective end use plants. There is no diversion of any coal from any mine whatsoever. The allegations are completely baseless,” Manu Kapoor, Director (External Affairs) at JSPL, told Business Line .
The news made JSPL stock fall drastically on the Bombay Stock Exchange on Friday. The scrip was trading down 8.36 per cent at Rs 223.10 on the bourse at around 3 p.m.
JSPL has an estimated coal reserves of more than 2,300 million tonnes in the domestic coal blocks allocated to the company. According to industry watchers, the company has the highest number of coal mines.
On June 11, the Central Bureau of Investigation registered a case against businessman-turned-Lok Sabha MP, Naveen Jindal, in the multi-crore coal allocation scam.
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