India's largest coal mine enmeshed in political tug of war, production hit

SECL had said it would increase its annual production to 250 million tonne in 2019-20 as its contribution to the 1 billion tonne target of Coal India

Korba coalfields, one of the country’s largest cluster of coal mines, is in  a tug-of-war with one of its contractors over surplus production. The three mines – Gevra, Kusmunda and Dipka --- that form the cluster are run by South Eastern Coalfields Limited (SECL). The mining operations are sub-contracted to Sainik Mining and Allied Services Limited, which wants to be paid extra for every surplus tonne produced.

Sources said the mining contract with Sainik Mining has concluded and SECL is not willing to renew it. This has led to a logjam with Sainik Mining refusing to let go of the contract or even reduce production from the mines.

In December 2018, SECL production fell 13 per cent year-on-year though it produced 110 million tonne coal. However, the production was  8.9 per cent higher compared to last year for the April-December period.

SECL had said it would increase its annual production to 250 million tonne in 2019-20 as its contribution to Coal India's one-billion-tonne target. To achieve this goal, SECL has been pushing its contractors to produce more coal. Sainik Mining, it is learnt, has asked for extra payment for producing more coal than mentioned in the contract. 

“The contractor has demanded that it be paid per tonne basis for every extra tonne coal produced. The contract of Sainik Mining with SECL has expired and the latter has not renewed it,” said an official.

Sources said there was a likelihood of SECL re-issuing the contract. However, the contract was in the middle of a political cross-fire too. Sainik Mining is owned by the extended family of Captain Abhimanyu Singh Sindhu, the finance minister of BJP-ruled Haryana. 

There are allegations that the Congress-ruled Chhattisgarh is pressuring SECL to not renew the contract with Sainik Mining. “Some state government functionaries have cited that the company and its owners do not have a good financial history. With this new demand of extra payment, the contract could land Sainik in trouble,” said an executive.

SECL did not respond to queries emailed by Business Standard to the CMD, SECL. Sainik Mining could not be reached.

The two promoters of Sainik Mining are Rudra Sen Sindhu and Captain Kuldeep Solanki. Rudra Sen Sindhu is the son-in-law of the late Sahib Singh Varma, a BJP leader and former chief minister of Delhi. Rudra Sen is also the brother of Captain Abhimanyu Singh Sindhu.

There are allegations of stamp duty evasion on Sainik Mining for non-payment of close to Rs 85 lakh for a mine allocation. An RTI activist had alleged that Sindhu used his political connections to get the mining contract and “undue benefits to his family-run Sainik Mining". The matter is pending before the Chief Minister of Haryana, as last reported.

With power demand rising, the government has asked Coal India Ltd to increase production. Coal supply faltered during 2017-18 due to a sudden increase in demand and non-preparedness at coal mining and transport ends. 

Last year, in November, the ministry of coal directed Coal India to “make immediate measures to ensure 2 million tonne-plus daily production and off take, with immediate effect, and increase supply to critical/super critical power plants.”