Bhushan Steel, SKS Ispat likely to lose coal blocks

Bhushan Steel and SKS Ispat Ltd are likely to see the cancellation of their coal blocks. The government’s high-level Inter-Ministerial Group (IMG) reviewing allotments made to captive miners has decided to recommend cancellation of the allocation of two blocks held by these companies.

SKS Ispat has been in the news lately, after its name figured in the coal block allocation scam. Union Tourism Minister Subodh Kant Sahai’s brother Sudhir Kant Sahai is an executive director in the company.

The panel, in its seventh meeting on the matter today, reviewed its earlier findings on the reasons for production delays in four blocks. These acreages include the New Patrapara block held by Bhushan Steel jointly with five other companies and the Rawanwara North block held by SKS Ispat Ltd. Both the blocks were de-allocated. The other two blocks reviewed today were Radhikapur East, being developed by Tata Sponge, and Bijahan, held by Bhushan Power. The panel recommended forfeiture of the bank guarantee in the last two blocks.

New Patrapara was allocated to Bhushan Steel in January 2006 and was expected to start production by December 2010. Rawanwara North was allocated to SKS Ispat in May 2007 and had a target date of commissioning in November 2011.

With this, the IMG has so far cancelled the allotments of seven blocks held by companies. The panel had on Thursday recommended the de-allocation of four blocks allotted to Castron Mining Ltd, Fieldmining and Ispat Ltd and DOMCO Smokeless Fuels Pvt Ltd. Another block being developed by steel major JSW Steel was axed on Friday.

The IMG has to submit its final report to the coal ministry on the de-allocation of 58 blocks where no significant progress has been registered by companies. The blocks being de-allocated are part of the 29 reviewed by the IMG in three meetings on September 6, 7 and 8. The panel will review the remaining 29 blocks allotted to public sector companies in the next round.