News Detail

The coal ministry has called a meeting of the inter-ministerial group (IMG) on 25 February to review allocated coal fields, including those awarded to Hindalco Industries Ltd, Essar Power Ltd, Tata Steel Ltd and Jindal Steel and Power Ltd (JSPL), according to a notice put up on the ministry’s website on Tuesday.

The subject of the meeting read: “26th meeting of the IMG under the chairmanship of additional secretary (coal) to undertake periodic review of the development of allocated coal blocks which have not come under production and were asked to furnish documents on statutory clearances by 12 February.”

On 16 January, the coal ministry published a notice saying it will review 61 coal blocks allocated to companies, threatening deallocation of blocks that do not have environment and forest clearances. The notice that was put up on Tuesday also goes out to owners of 10 coal blocks so that they can make presentations to the IMG about their preparedness for obtaining forest clearance stage II, it said.

Among the coal blocks named are Mahan in Madhya Pradesh belonging to Essar Power and Hindalco; Ganeshpur in Jharkhand belonging to Tata Steel; Jitpur in Jharkhand belonging to JSPL and Rohne in Jharkhand belonging to JSW Steel Ltd and Bhushan Power and Steel Ltd. An analyst said that there may not be an immediate deallocation after the IMG’s meeting.

“The companies will try to prove two things—that they do have the resources to mine their blocks provided clearances are given. And that they need it for their captive use,” said Arun Kejriwal, director of KRIS, an equity research firm. “I don’t think the IMG will have an instant outcome—they will hear and tell them they will revert to them,” Kejriwal added.

Most of the companies are keen to start mining their coal blocks but are hamstrung because of lack of multi-layered clearances needed to develop the mines. Tata Steel managing director (India and South East Asia) T.V. Narendran’s statement after the budget on Monday was a reflection of the logjam companies are facing owing to stuck clearances.

“It needs to be noted that the industry’s problems are more structural in nature. While the finance minister has highlighted the role played by the cabinet committee on investment in clearing stuck projects, there is an urgent need for a comprehensive review of the entire mechanism for grant of clearances such as (the environmental and forest clearances) to industrial projects in the country,” Narendran said.

“In order to spark an industrial revival, the government needs to implement a time-bound, simple mechanism that is fair to all stakeholders, and encourages economic activity in the country,” Narendran added.

Essar Power said in a statement on 12 February that Mahan Coal Ltd, the joint venture company of Hindalco and Essar, has been granted stage II forest clearance from the ministry of environment and forests.

Mahan coal block, allocated in 2006, is 50 Percent owned by Essar Power, but the block could not be developed into a mine owing to a myriad problems ranging from lack of clearances to opposition by former environment minister Jairam Ramesh among others. “Mahan Coal Ltd will now be required to sign a mining lease with the state of Madhya Pradesh before commencing mining operations,” Essar said.

Jindal Steel and Power Ltd (JSPL) spokesperson said: “JSPL has already got the environmental clearance and forest clearance (FC) stage I for Jitpur coal block and we have complied with almost all the conditions of FC stage I. Further, we expect to get FC Stage II clearance shortly.” Spokespersons of Tata Steel, JSW Steel, Hindalco and Essar Power did not immediately respond to emailed queries.

Source-On Request