Facing criticism for not acting on the recommendations of the Inter-Ministerial Group (IMG) for de-allocation of coal blocks, the Coal Ministry on Wednesday decided to cancel six more coal blocks of private companies and deduct bank guarantees in the case of seven companies for failure to develop coal mines within the given deadlines, including those belonging to the CBI-raided Jayaswal clan, ArcelorMittal, GVK Power and Jindal Steel and Power Limted.
Sources in the government said Coal Minister Sriprakash Jaiswal, who had ostensibly been sitting on the files for cancellation of coal blocks for almost five days, gave the go-ahead for the cancellation and deduction of bank guarantees following muted criticism against the Centre for not acting swiftly on the recommendations of the Zohra-Chatterjee-headed IMG.
The blocks that faced cancellation on Wednesday included the Bhaskarpara coal mine allotted to Grasim Industries and Electrotherm; the Dahegaon Markardhokra-IV coal block to IST Steel & Power; the North Dhadu coal mine allotted to Electrosteel Castings; the Choritand Telaiya coal asset allotted to Rungta Mines and the Gondkhari coal block allotted to Maharashtra Seamless.
The seven blocks approved for deduction of bank guarantees includes Seregarha coal block given jointly to the world’s largest steel producer ArcelorMittal and GVK Power; the Moitra coal block allotted to Jayaswal Neco; the Dumri coal block given to Neelachal Iron & Steel and the Durgapur II/Sariya block allotted to DB Power, reportedly owned by a media house.
With this, the government has accepted all the recommendations of the IMG, which had recommended de-allocation of 13 mines and deduction of bank guarantees of 14 allottees after scrutinising 29 coal blocks allotted to private companies. Two coal blocks belonging to Reliance Energy and Tata Group were given a clean chit.
Among the de-allocated blocks, the Dahegaon-Makardhokra-IV block was given to IST Steel and Power, along with cement firms Gujarat Ambuja and Lafarge India, in June 2009. The block has a total of 48.84 million tonnes (MT) of extractable reserves. The Bhaskarpara block was allotted to Electrotherm Ltd. and Grasim Industries jointly on November 21, 2008, for a sponge iron project. It has extractable reserves of 18.67 MT. Both the blocks are in Chhattisgarh. The North Dhadu mine in Jharkhand, allotted to Electrosteel Castings & Others, in January 2006, has extractable reserves of 340 MT and the coal from the mine was meant to be used in sponge iron project. The Choritand Telaiya mine in Jharkhand was allotted to Rungta Mines & Sunflag Iron & Steel in May 2008 for a pig iron project. It has extractable reserves of 70.81 MT. The Gondkhari mine in Maharashtra was allotted to Maharashtra Seamless Ltd. in November 2008.
Among the mines recommended for deduction of bank guarantees, the Seregarha block in Jharkhand was allotted jointly to ArcelorMittal and GVK Power in January 2008 for a power project. The mine has extractable reserves of 55.5 MT. The Dumri block in Jharkhand, which has extractable reserve of 40.85 MT, was jointly given to Neelachal Iron & Power Generation & Bajrang Ispat in January 2006 for a sponge iron project. The Durgapur II/Sariya block in Chhattisgarh with reserves of 66.9 MT was allotted to DB Power in November 2007. The Moitra block in Jharkhand, with estimated extractable reserves of 29.9 MT, which also has been recommended for deduction of bank guarantee, was allotted to Jayaswal Neco in May 2005. The IMG is likely to begin review of 29 more coal blocks allotted to PSUs from October 9.