JSPL to move court against coal block de-allocation

Jindal Steel and Power Ltd (JSPL) intends to appeal in court against the government decision to de-allocate the coal block allocated to it, a company source said Wednesday.

A JSPL spokesperson earlier said the company sees "no reason" behind the de-allocation as environment clearance for the coal block in Chhattisgarh was given on Feb 10.

Pointing out that an "IMG (inter-ministerial group) recommends de-allocation of the block" as environment clearance "has not been granted as on the cut-off date" to the Gare Palma IV/6 coal block, the government, however, has put on hold further action as a case is pending in court.

Following the IMG's recommendations, the coal ministry had on Monday de-allocated 10 coal blocks allotted to various firms, including Adani Power, Jindal Steel and Power Ltd (JSPL), Uttam Galva Steels and ACC Cements.

The decision to de-allocate another six coal blocks of companies like JSPL, Sterlite Energy and Lanco, was put on hold in view of cases pending in courts.

In a letter to the companies, the ministry said: "The recommendations of IMG have been considered and accepted by the competent authority on February 11, 2014. However, further action is put of hold."

The IMG had recently recommended de-allocation of 29 captive coal blocks for delay in starting production.

The JSPL spokesperson said that following the recommendations of a committee of the environment ministry "the EC (Environment Clearance) was granted on February 10, 2014".

The company said it has already made an investment of Rs.3,941.93 crore on the expansion project of its sponge iron capacity and associated facilities.

The coal block, with reserves of 4 million tonnes per annum, was allocated jointly allocated to JSPL and Nalwa Sponge Iron Ltd in January 2006 for sponge iron.