The loss of two coal blocks for the second time following a Delhi High Court judgement last week has put the investments of Jindal Power Limited
(JPL) under stress. The company could lose around Rs 170 crore invested in the coal washery and a conveyor belt associated with the Gare Palma-IV/2&3 coal block in Jharkhand.
The government has decided not to set up any committee to take a decision on the matter. The high court had asked the government to consider setting up a committee for overseeing operations at the mines. "No committee is needed for this. The HC has clearly supported our stand. Coal India
is mining coal from the block. We would not re-auction the mine as currently there is no demand for power sector coal mines," said a senior coal ministry official requesting anonymity.
Another official said that the government might ask the company to dismantle the attached mining infrastructure as the state-owned Coal India
is mining coal from it. JPL has invested close to Rs 325 crore in the plant, which includes coal washery cost of around Rs 100 crore. Apart from that, it has invested Rs 70 crore in the conveyor belt.
In it's judgement, the HC has given four weeks time to JPL to take a decision on the infrastructure.
Company executives said that their decision would depend on the coal ministry's stand on the matter. "If they ask to dismantle, we would move court. Transferring to Coal India
is out of question. And, government will find it difficult to re-auction the mine as the same bid of Rs 108/tonne is impossible to be repeated," said an executive who refused to be quoted due to legalities involved in the matter.
The case pertains to the two coal blocks won by JPL – Tara in West Bengal and Gare Palma
IV/2&3 in Jharkhand – in the e-auction. JPL was the former owner of the Gare Palma-IV/2&3 coal blocks before a Supreme Court judgement in August 2014 cancelled all allocations made over the past two decades.
It got back the mines in India's first coal e-auction held in February 2015. However, the ministry of coal did not approve the bids received for these coal blocks, citing “comparatively low bids" as the reason. JPL moved Delhi High Court challenging the decision of the Central government.
The HC upheld the government’s discretion, saying that it did not find “any fault with the decision of the Government in not declaring JPL as the successful bidder”.
The Coal Mining Special Provisions Act, 2015, does not cover the attached infrastructure with the mine except the end-use plant.
"Our investment on the mines stands still. The Act only covers the power plant. The fate of the washery and conveyor belt as mining infrastructure is not identified in the Act. There is no way we can get compensation for that. The only resort is legal route," said the JPL executive.
The combined heat & power plant near the Gare Palma-IV/2&3 coal blocks is currently sourcing coal through e-auction held by Coal India
and its other mines.
Gare Palma-IV/2&3 is one of the richest mine cluster in the country. The cumulative capacity of these two mines is 155 million tonne, with an annual peak rated capacity of 6 million tonne — the highest among all coal blocks put for auction in 2015-16.
The government is unfazed by any legal route JPL might take. "If they move to court and if they get a stay, it would make no difference to us. It will neither cause any loss or benefit to us. The mines stay with Coal India
and re-auction is not an option in near future," said a senior coal ministry official.