SC verdict may thwart Adani's mining plans in Odisha

Adani Group is likely to lose two contracts for developing coal blocks in Odisha after the Supreme Court verdict of cancelling 214 blocks allocated since 1993.

Adani Enterprise ltd, the group’s flagship company was selected as 'Mine Developer and Operator (MDO)' for development and operations of Machakatta coal block and Chhendipada and Chendipada-II coal blocks in Angul district.

The coal ministry had allocated 32 blocks in Odisha all for captive consumption. Of this, seven had already been de-allocated by the ministry. The remaining 25 blocks now stand cancelled after the apex court ruling that includes the Machakatta and Chhendipada coal blocks.

The Chhendipada and Chhendipada-II blocks with a mining capacity of 40 million tonne per annum (mtpa) was allocated to UCM Coal Company, jointly promoted by Maharashtra State Power Generation Corporation Ltd (Mahagenco), Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL) and Chhattisgarh Mineral Development Corporation (CMDC) while the Machhakata coal block was allotted  to MahaGuj Collieries Limited (MGCL), a joint venture between Maharashtra State Power Generations Corporation Limited (Mahagenco) and Gujarat State Electricity Corporation Limited (GSECL). This block projects an initial mining capacity of 30 mtpa.

The apex court’s verdict may also hamper the group’s plan for setting up of  2,500 Mw rejected coal based power plant in Angul district as the raw material was to be sourced from these coal blocks.

Within few months the group was planning to sign memorandum of understanding (MoU) with the state government for the power plant with an investment of around Rs 12500 crore.Calls made to a top company official did not elicit any response. Recently, the company’s plan to mine coal from the Machhakata block was opposed  by the locals.

The public hearing for mining the block with mineable reserve of 1244 million tonne was scrapped due to stiff resistance of the locals. The project is estimated to cost Rs 20,000 crore.

According to the company’s website, Adani Group had floated a special purpose vehicle — Adani Mining Private Limited (100 per cent subsidiary of Adani Enterprises Limited) in August 2007 with the purpose to undertake activities related to development and operation of domestic coal mine.Currently Adani Group is implementing coal mining projects with total annual coal production capacity of around 110 mtpa.

Social activist and Lok Shakti Abhiyan president Prafulla Samantara who was opposing the company’s mining plan of Machhakata block, said, the state government should now withdraw the land acquisition process for the coal block and notifications issued must be cancelled. “All the blocks in the Chhendipada area should be preserved for future to save the agricultural lands and should not be auctioned now”, he added.