Coalgate: Licenses of 4 mines to be revoked; decision on 6 blocks held by Tata, Hindalco, Reliance, others today

NEW DELHI: The government has decided to terminate mining licences of four blocks, three of them granted during the NDA regime in the past, and will decide on Friday the fate of six blocks with reserves of 2.2 billion tonnes held by 14 firms, including Tata Steel, Hindalco, Tata Power and Reliance Power.

The Centre has accepted the inter-ministerial group's recommendation that two blocks held by Nagpur-based Field Mining and Ispat, Ranchi-based Domco Smokeless Fuels, and Kolkata-based Castron Mining be cancelled. IMG reviewed eight blocks, including the four with reserves of 70 million tonnes that have been de-allocated.

A senior coal ministry official said the three companies did not put up the associated end-use projects as required under law. Industry sources say some of the companies facing the heat have strong linkages with politicians. The promoters of Castron Mining are believed to be close to Anup Aggarwalla, who has strong links with BJP, industry sources said.


Coal Minister Sriprakash Jaiswal said IMG, headed by additional secretary Zohra Chatterji, will consider other blocks held by private companies by Monday. "We will go by whatever is recommended by IMG and take a decision as soon as the report comes in.

Since there is a diverse representation in IMG, all views are being considered before recommendations," he told ET. He said the government would decide if the de-allocated blocks should be auctioned or given to state-run Coal India.

On Friday, IMG will take a decision on mining licences of six blocks, including major ones like Patrapara mine with 1,042 million tonnes and Moher and Moher Amlohri Extension blocks with 600 million tonnes of reserves. Reliance Power has already announced that it has started producing coal from the two mines attached to its Sasan ultra mega power project.

Jaiswal told reporters that the inter-ministerial group has been asked to recommend action on a total of 29 coal blocks held by private companies. The Comptroller and Auditor General had in its recent report on coal blocks questioned the allocation of 21 of these mines.

The minister said the group comprising the joint secretaries of finance, power, coal and law ministries will present its recommendations to the ministry in parts.

The coal ministry has decided to ask Monnet Ispat & Energy to mine its Utkal B2 coal block by March 2013. The company will be asked to deposit a bank guarantee of about Rs 90 crore that will be encashed if the block is not developed in time.

Bank guarantees of three blocks of Shri Virangana Steels will be deducted as the company did not meet the specified schedule. The three blocks are Markhi II, Markhi III and Markhi- IV.

The coal ministry had in April issued notices to 58 block owners for not meeting specified developmental milestones. The ministerial review panel has heard presentations of 29 private companies and is soon expected to invite state-owned firms for status reports.