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Though the government made a case in the Supreme Court for exempting 46 coal blocks from deallocation, another 15 blocks have ready projects but did not make it to the list. Among companies that could have seen the government pleading on their behalf were Hindalco, Essar and Jindal Steel & Power.
The Supreme Court had ruled on August 25 the allocation of captive coal mining rights in 194 blocks illegal. The government in an affidavit filed on September 8 had said it was not insisting on an exemption.
Under the coal block allocation policy followed since 1993, captive mining rights were given out to companies in the steel, power, cement, coal-to-liquid and coal-to-gas sectors. Commercial mining of coal is still not allowed.
Ravi Uppal, MD and group CEO, JSPL, said any cancellation of coal allocations would be an extreme step. "If the private sector was not producing power the country would have been short of 65,000-70,000 Mw. Of the 108 million tonne steel capacity in the country, private companies produce 80 million tonnes...," he said.
Uppal said JSPL had invested Rs 20,000 crore in its Angul steel project. Coal for this project was to come from the Utkal block, but the company has been awaiting a mining lease from the Orissa government for two years now. It is using imported coal to keep the first phase of the project running.
JSPL is setting up a 6 million tonne integrated steel plant. A 2.5 million tonne steel melting shop has been commissioned. Besides, a 1.5 million tonne plate mill and a 810 MW captive power plant have been commissioned.
Uppal said the Supreme Court and the government should not take the extreme step of cancelling allocations. "For any investor, continuity of a sovereign government's decision is very important. Cancellation of allocation would be out of place with what the government is trying to do for manufacturing in the country. It should be done only in cases where unethical practices were used," he added.
