Coal Ministry to take back Sitanala mine in J'khand from SAIL

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The government has decided to take back Sitanala coking coal block in Jharkhand from the country's largest steel producer SAIL on accounts of delays in the development of the mine.

"A very little progress has been made in the development of the coal mines and the allottee has decided to surrender the same...As such there is no reason why the allotment agreement should not be terminated.

"In view of the above, it has been decided to terminate the allotment agreement and allotment order in respect of Sitanala coal mine. However...the agreement and allotment order shall stand terminated w.e.f. October 25, 2018...," the coal ministry said in a letter to Steel Authority of India Ltd.

The PSU had in March and again in April written to the coal ministry for surrendering the coal block. In the letter written on April 27, the Steel Authority of India Ltd (SAIL) had said that the block was techno-commercially non-viable.

"In this context, it is relevant to mention that SAIL is the prior allottee of the said block since April 2007 and as such must be aware of all the conditions of the mine at the time of allotment. Moreover, SAIL being the prior allottee had prepared the mining plan of Sitanala coal mine prior to re-allotment, being aware of the geological conditions of the mine, and the same was vested to them consequent upon reallocation," the ministry said in the letter.

Also, being the prior allottee, the PSU should have undertaken techno-economic viability study prior to entering into the process of re-allotment and signing of allotment agreement with the Nominated Authority, it added.