Govt may issue notices to cos sitting on coal blocks

The coal ministry is likely to issue show-cause notices within a month to about 50 block holders asking them to either start production or face deallocation, sources said.

The development comes close on heels of a direction from the Prime Minister's Office to the coal ministry to ensure adequate supplies of coal to power producers.

The decision to issue show-cause notices to those sitting idle on captive coal blocks was taken by a panel looking into the development of reserves, sources said.

"It has been decided to issue show-cause notices to around 50 coal block holders sitting idle on the mines allocated to them for captive use. The notices are likely to be issued within a month, " a source said.

Concerned over the increasing demand supply gap, the coal ministry had in January reviewed the progress of mines allocated to companies, including Tata Steel, Coal India, SAIL and NTPC for captive use.

The progress of coal blocks allotted to firms, including Jindal Power, Jindal Steel & Power, Balco and MMTC was also reviewed during the two-day meeting.

Last year, the Coal Ministry had cancelled allotment of 14 coal blocks and one lignite block to six PSUs, including NTPC, and three private firms for failing to develop mines.

However, in January government gave back six coal blocks of the deallocated mines to firms, including Damodar Valley Corporation and Tenughat Vidyut Nigam Limited and NTPC.