CoalMin cancels blocks

Further, the ministry threatens axing Adani Power's block

The coal ministry has cancelled the Urtan North coal block allocated jointly to Jindal Steel and Power and Monnet Ispat & Energy Ltd, for delays in the development of reserves. The block in Madhya Pradesh was allocated to the companies in October 2009 to fire their sponge iron plants.

An inter-ministerial group (IMG) issued showcause notices to the firms in June. Their arguments explaining the multi-year delay failed to cut ice. “The suggestion of the IMG has been considered and approved by the government. It has been decided to de-allocate the block,” the ministry said on Tuesday.

The companies have so far invested Rs 11.6 crore in the block. However, additional investments of Rs 6,283 crore have been made by Monnet and Rs 3,416 crore by JSPL in the end-use projects.

The ministry also cancelled the allotment of the Mokala Lignite block held by Rajasthan’s state-owned mining company. In addition, a show-cause notice has been issued to Adani Power Ltd for delay in the development of its Lohara West & Lohara Extension block.

The government has allocated 218 captive coal blocks with reserves exceeding 49 billion tonnes since 1993. The ministry has cancelled licenses of 51 coal blocks over the past two years on the basis of recommendations of an inter-ministerial panel that found development efforts by corporates severely wanting.

The de-allocation drive comes amid rising coal imports to meet the domestic shortfall that touched 135 million tonnes last fiscal and allegations of corruption against the government in allocations.