IMG not to reconsider CTL coal block cancellation

Coal ministry had deallocated blocks awarded to Tata Sasol, Jindal Steel

The inter-ministerial group (IMG), mandated to oversee status of allocated coal blocks, has turned down Odisha’s plea to reconsider its recommendation for de-allocating two blocks allotted in the state for coal-to-liquid (CTL) projects.

Based on IMG’s recommendation, the Coal ministry had recently de-allocated North of Arkhapal Srirampur block awarded to Tata Sasol and Ramchandi block allocated to Jindal Steel & Power Ltd (JSPL).

The IMG observed that no new facts were brought to light by the state government, warranting reconsideration of its earlier recommendation given in respect of these two CTL blocks.

In case of Ramchandi promotional CTL block, the IMG noted that only bank guarantee (BG) was submitted and the allottee had not taken any clearance and even after lapse of four and a half years, the developer was unable to procure even the prospecting license (PL), the first step towards coal mine development.

Consequently, preparation of geological report (GR), mining lease application, submission of mining plan (MP), approval of MP, application of previous approval, application of forest clearance and completion of land acquisition were pending.

Similarly, for North of Arkhapal Srirampur, only BG was submitted and the allocatee had not obtained any clearance. Major milestones like preparation of GR, submission of MP, approval of MP, application of forest clearance, application of EMP (environment management plan) clearance and completion of land acquisition were pending.

The de-allocation of the two coal blocks has sealed the fate of two CTL projects whose combined envisaged investment exceeded over Rs 1 lakh crore. The North of Arkhapal Srirampur was to be developed by Strategic Energy Technology Systems Pvt Ltd (SETSL), a joint venture between a consortium of Tata companies and Sasol of South Africa. SETSL had proposed the CTL project at an undecided location in Dhenkanal district at a cost of Rs 45,000 crore. With a production capacity of 80,000 barrels per day, the project promised about 6,400 direct jobs.

The other CTL project was to be developed by Jindal Synfuels Ltd, a fully owned JSPL subsidiary. The ambitious project was to cost Rs 60,000 crore.