Will cancel blocks of 35 firms, CoalMin warns

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 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.