Govt threatens to cancel coal block allotted to Nalco

The government has threatened to cancel a coal block allocated to aluminium maker Nalco for captive use, citing delay in the development of the mine.

In the show-cause notice issued to the company on October 12 for delay in developing the Utkal-E coal block in Orissa, the Coal Ministry said, “The progress (in development of the block) is badly delayed and no serious effort has been made to develop the coal block since the allotment of the block made in the year 2004.

“...and moreover the gestation period of 3.5 years to develop the explored block is also over,” the coal ministry said in the letter.

The coal ministry has also taken a serious view of the absence of company officials in series of review meetings it convened to discuss the progress on development of the block.

“No representative attended the (review) meetings, which is a serious lapse on the part of the company. The review meeting has viewed the absence of the company in successive review meeting seriously,” it added.

Nalco officials could not be contacted for comments despite repeated attempts.

The coal ministry has sought Nalco’s reply within 15 days of the issue of the letter, failing which the process to de-allocate the block would start.

The Coal Ministry is in the process of issuing notices to 40 companies for failing to develop mines in the blocks allotted to them. ArcelorMittal, Binani Cement and MMTC, JSPL among others have already been issued such show-cause notices.

Coal Minister Sriprakash Jaiswal had earlier said the motive behind such an exercise is to weed-out non-serious players, who are sitting on such reserves and have not started the development process in due time.