Showcause notices to 6 cos for delaying coal mines development

Summons 35 corporates for review of captive production from working mines on Thursday

Continuing with its drive against defaulting captive coal miners, the coal ministry has threatened canceling allocations of reserves held by six companies including Essar Power, Rungta Mines and state utilities of Madhya Pradesh and Jharkhand. Also, the ministry has summoned 35-odd companies holding 47 blocks which are under production, or are likely to start operations this fiscal, for a review on Thursday.

The ministry Monday issued show-cause notices to Essar Power for delays in development of Chakla and Ashok Karkata blocks and Rungta Mines for its Bundu coal block in Jharkhand. The ministry has sought explanation for the delay within 20 days, “failing which action as appropriate would be taken against your company for de-allocation of the block,” the notice said.

The government has allocated 218 captive coal blocks with reserves exceeding 49 billion tonne (BT) since 1993. Of these, licenses of 51 coal blocks have been cancelled over the past two years based on the recommendations of an inter-ministerial panel that found the development efforts by corporates severely wanting. The action comes amid rising coal imports to meet the domestic shortfall that touched 135 MT last fiscal and allegations of corruption against the government in allocations.

The companies summoned on Thursday by the ministry include RPG Industries, Hindalco, SAIL, Jindal Steel (JSPL), Monnet Ispat, Prakash Industries, GVK Power, Jaiprakash Associates, Sunflag Iron & Steel, Electrosteel Castings, Damodar Valley (DVC) and West Bengal Power Development Corporation (WBPDC).

Captive coal miners were expected to ramp up production to 100 MT by March 2012 but failed miserably triggering a historic coal supply crisis. These companies currently produce around 36 MT coal annually from the 38 blocks under operation. In addition, nine captive coal acreages are likely to commence production by March 2014.