Fri, 22 Nov 2013 22:00:00 GMT

Coal Ministry to de-allocate 11 blocks

This is after an Inter-Ministerial Group headed by Additional Secretary to the Coal Ministry sent its recommendations to de-allocate blocks and deduct the bank guarantees


Coal Ministry to de-allocate 11 blocks (© Reuters)

New Delhi: Coal Minister Sriprakash Jaiswal has given his go-ahead to de-allocate 11 coal blocks for not being able to explore them as per set timelines.

The companies, which are losing the blocks, are: JSPL, Strategic Energy Technology Systems (a joint venture between Tata Group and Sasol), Birla Corporation, Rungta Mines, OCL India, Ocean Ispat, Monnet Ispat and Energy, Topworth Steel, Rathi Udyog, Sunflag Iron Steel and Castron.

A decision to this effect was taken by the Minister on Thursday, a Coal Ministry official told Business Line.

This is after an Inter-Ministerial Group headed by Additional Secretary to the Coal Ministry sent its recommendations to de-allocate blocks and deduct the bank guarantees.

De-allocation of blocks

With the latest de-allocations, the number of blocks taken back by the Government stands at 51. Earlier, 40 blocks were de-allocated.

The Ministry has also decided to forfeit the bank guarantee of six firms, the official added.

The Inter-Ministerial Group undertook a review of 30 blocks. Before the de-allocation, all the companies were served with show-cause notices and allowed to present their cases before the review committee.

Big blow for JSPL

The biggest setback is for JSPL, whose two blocks -- Ramchandi Promotional and Amarkonda Murgadangal – another one it hold along with Monnet Ispat & Energy (Urtan North), will have to be surrendered to the Government.

Coal-to-liquid project

The latest de-allocation also brings to an end the fate of coal-to-liquid (CTL) project. (In a CTL project, liquid fuels such as methanol, petrol and diesel are produced from coal.)

In 2009, the North of Arkhapal Srirampur block in Odisha with nearly 1,500 million tonnes of estimates reserves was awarded to Strategic Energy Technology Systems.

Ramchandi Promotional block with similar coal reserves was awarded to JSPL. But neither of the companies have developed the block nor made progress in setting up the CTL plant.

Other companies that will lose their block include Rungta Mines, OCL India and Ocean Ispat which were allocated Radhikapur (West) in Odisha.

On the other hand, the Rajgamar Dipside block awarded to Monnet Ispat and Energy and Topworth Steel and Kesla North mine allocated to Rathi Udyog Ltd have also been cancelled.

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