Will snatch back undeveloped coal blocks, issuing notices: Govt

Threatening to take away coal and lignite blocks allocated to 81 firms, including ArcelorMittal, Tata Steel and NTPC, the government today said it has started the process of issuing notices to companies that have delayed mining in their properties.

"We are in the process of issuing showcause notices to companies sitting on captive coal and lignite reserves for years. After reviewing their responses, we will decide on deallocation of the blocks," Coal Minister Sriprakash Jaiswal told Press Trust of India.

In July, the ministry had convened a review meeting with the concerned companies, who have been allocated a total of 207 coal blocks for captive use under power, cement and steel projects.

"We want to enhance the coal production of the country. For this, we can snatch the coal blocks back," Jaiswal added. India produced about 532 million tonnes of coal in 2009-10 and aims to cross the 600 million tonnes mark in 2010-11. However, the demand-supply gap is likely to be in the range of 80 million tonnes. The gap is expanding rapidly, he said.

Sources in the ministry said that showcause notices for deallocation have already been issued to companies like ArcelorMittal, NTPC, Jindal Steel and Power, Tata Steel and NTPC, among others.

"Out of 96 coal blocks allocated to PSUs, only 12 are in production. We are issuing showcause notices on 45 coal blocks. Also, out of 99 coal blocks allocated to private companies for captive use, 14 are in production. We are in the process of issuing notices on 48 blocks," a senior government official added.

Besides showcause notices, the government is also issuing advisories to companies developing 23 coal blocks to either make progress or risk deallocation."Out of these 23 blocks, seven blocks are the ones allocated for Ultra-Mega Power Projects," the official added.

Sources said that NTPC could be issued showcause notices for its failure to develop five coal blocks allocated to it as early as 2004.

"ArcelorMittal India Ltd and GCK Powers have been allocated the Seregarha coal block in Jharkhand. Also, ArcelorMittal has been allocated the Rampia coal block along with five other companies in Jharkhand and faces the threat of deallocation," it said.

Similarly, the government is issuing such notices to four lignite blocks, including DCM Shriram and Binani Cement, which were allocated lignite blocks for captive use in 2007.

In the previous such drive, the government had deallocated 11 coal blocks. Jaiswal had earlier said the government would strive to weed out non-serious players from the business.