ArcelorMittal's exit hinders Rampia coal block development

426 ha of the block overlaps with MCL coal block

ArcelorMittal's exit from its 12 million tonne greenfield steel plant in Odisha has posed a hurdle to developing the Rampia coal block in the state.

 

With ArcelorMittal, one of the co-allocates of the coal block, surrendering its  share of the block after aborting its steel project, the state government is in a fix over processing of the block. 

 

Also, a portion of the Rampia coal block is found to be overlapping with the coal block VIII already acquired in favour of Mahanadi Coalfields Ltd (MCL). The extent of overlapping has been found to the tune of 426 hectares (ha).

 

In the wake of these two hurdles, the state steel & mines department has sought clarification from the Coal ministry on grant of prospecting license (PL) pending for the coal block.

 

"It may be kindly clarified as to whether the overlapped area is to be excluded from the (Rampia) coal block. Further, it may also be clarified as to whether processing for grant of PL should continue in view of one of the co-allocatees having surrendered its share in the allocated coal block”, G Srinivas,, Odisha steel & mines secretary wrote to joint secretary, Ministry of Coal.

 

The Coal ministry had jointly allocated the Rampia coal block to six companies- ArcelorMittal, Sterlite Energy, GMR Energy, Lanco Group, Navabharat Power and Reliance Energy in 2008.

 

A joint venture company- Rampia Coal Mine & Energy Pvt Ltd (RCMEPL) was incorporated for developing the coal mine with a shareholding of 13.04 per cent by ArcelorMittal. The steel giant's allocation was of 84.16 million tonne of coal for 30 years for its proposed 750 Mw power plant proposed in Keonjhar, the site of its now shelved steel project.

 

ArcelorMittal has already communicated its decision to surrender its share of the coal block to the Coal ministry.

 

"In view of continuing inordinate delay in getting the PL, RCMEPL is unable to commence drilling, prepare geological report and adhere to the subsequent milestones as fixed in the allocation letter. In the meantime, ArcelorMittal has revisited its industrial plan, and inter-alia due to this delay, has decided not to pursue with the project at this stage. After careful consideration of the matter and in the prevailing situation, ArcelorMittal desires to surrender its proportion of the coal allocation in the Rampia coal block”, Mahendra Pratap Singh, director, ArcelorMittal stated in a recent letter to Coal secretary.

 

The company's letter points out that about 30 per cent of the surface land in the allocated block to RCMEPL has already been alloted to MCL in September 1990 under the provisions of Coal Bearing Areas (Acquisition and Development) Act, 1957.