Govt threatens to cancel block allotted to ArcelorMittal, GVK

The government has threatened to cancel the coal block alloted jointly to ArcelorMittal and GVK Power in Jharkhand for the inordinate delay in developing the property.

The coal ministry has served notice on September 23 to both the companies and sought their replies within 15 days, seeking reasons for the delay in developing the mines allotted for captive use.

"In spite of a passage of almost one and half year, no serious effort has been made by your company to develop the coal block as per the milestone chart appended to the allotment letter. Consequently, the development of the coal block has been inordinately delayed," the ministry said in the letter dated September 23.

The ministry said the exploration has not begun as yet whereas it should have been completed by now as per the time schedule for development of the block.

Asking both the companies to reply within the stated time-frame, the ministry said, "...Falling which it will be presumed that your company has no explanation to furnish and action as appropriate will be taken against your company for de-allocation of Seregarha coal block."

When contacted ArcelorMittal India CEO (Mining) M P Singh said, "ArcelorMittal has received the show-cause notice. But delay is not because of us. We will reply appropriately to the coal ministry soon."

GVK Power also confirmed receiving the notice.

ArcelorMittal was alloted the Seregarha block in Jharkhand to meet the coal requirement of 103.50 MT for its 750-Mw captive power plant at Sariakela in Jharkhand with GVK Power which needed 82.80 MT coal for 600 Mw power plant in Punjab.

It is learnt that the Jharkhand government has taken a decision not to grant any mining and prospecting licences during the prevailing President Rule in the state.

The steel major is struggling to get various regulatory clearances for its proposed Rs 1 lakh crore steel plants in Jharkhand and Orissa having 12 million tonne per annum (MTPA) capacity each.