You are here: Home » Economy & Policy » News
Business Standard

CoalMin warns will cancel blocks of 35 firms

RPG Industries, Hindalco, SAIL, Jindal Steel, Monnet Ispat, GVK Power and Jaiprakash Associates among companies summoned for review

BS Reporter  |  New Delhi 

The coal ministry has threatened to cancel allocations of reserves held by six companies, including Essar Power, Rungta Mines and the state utilities of Madhya Pradesh and Jharkhand, as part of its ongoing drive against defaulting captive coal miners.

The ministry has also summoned 35-odd companies holding 47 blocks under production or likely to start operations this financial year, for a review on Thursday.

On Monday, the ministry issued show-cause notices to Essar Power for delays in development of the Chakla and Ashok Karkata blocks and Rungta Mines for its Bundu coal block in Jharkhand. The ministry has sought an 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 notices said.

The government had allocated 218 captive coal blocks with reserves exceeding 49 billion tonnes (BT) since 1993. Of these, licences 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 companies severely wanting. The action comes amid rising coal imports to meet the domestic shortfall that touched 135 million tonnes in 2012-13 and allegations of corruption against the government in allocations.

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

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.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, December 18 2013. 00:48 IST