Mittals Threaten To Pull Out Of Bhadrawati Project

In a new twist to the 1,080 mw Bhadrawati fast-track power project, the Mittals-promoted Ispat group has indicated that they may be forced to withdraw from the project if the defence ministry fails to clear the location of the captive mine block allotted to the company for the project.

In a meeting with the Union government the Mittals declined the offer of fresh coal blocks for the Bhadrawati project on the grounds that it would call for fresh studies on the coal block to determine the price of coal. Since this study could take up to two years, the Mittals said that they were not willing not wait that long.

 

This offer was made by the coal ministry in the event of the defence ministry not approving the mines location.

The promoters of the project were allocated a captive coal mine by the coal ministry adjacent to the Chandrapur Ordnance Factory which makes explosives for the defence forces.

Since the process of extracting coal using open cast technique and systematic explosions poses a threat to the adjacent Ordnance Factory, the promoters were required to get a clearance from the defence ministry for their mine before proceeding with the project.

According to official sources, the defence ministry has already conducted tests on the impact of explosions on the Ordinance Factory and is expected to come out with their study by the month-end.

The Maharashtra High Court has also issued a stay order against the project after the sitting Bharatiya Janata Party MP from Nagpur, Bhanwarilal Purohit, filed a case against the project.

The Union government had recently approved the Maharashtra State Electricity Boards pricing formula for the coal which would be extracted from the mine adjacent to the Ordinance Factory. However, this price will not hold if the excavation site is changed.

The captive coal mine is being promoted by Central India Coal Company, while the power project is being promoted by Central India Power Company. The project, which would cost about Rs 5,000 crore, consists of a captive mine and a power project which is being jointly promoted by the Ispat group along with EdF of France and GEC of UK.