Tuesday 18 September 2012

JSW Steel, HEP lose coal block

IMG recommends bank guarantee deduction of Tata Power and Hindalco

BS Reporter / New Delhi Sep 18, 2012,
JSW Steel and Himachal Emta Power today lost a coal block in West Bengal, while Tata Power and Hindalco Industries are likely to lose the bank guarantee for their block in Jharkhand.

Today, the government cancelled the allocation of the Gourangdih ABC block in West Bengal’s Raniganj coalfields. Deallocation of the block, being developed by JSW Steel and Himachal Emta Power, was recommended on Friday by an inter-ministerial group (IMG) looking into irregularities in the allocation of coal blocks.

So far, the coal ministry has cancelled the allocation of five blocks — Bramhadih by Castron Mining, Chinora and Warora (south) by Fieldmining & Ispat, Lalgarh (north) being developed by DOMCO Stainless Fuels and JSW’s Gourangdih block. Coal Minister Sriprakash Jaiswal is likely to approve the IMG’s recommendation of cancelling two additional blocks — Rawanwara North and New Patrapara — being developed by SKS Ispat and Bhushan Steel.
Together, the seven blocks — the five deallocated ones and the two likely to be deallocated soon — have combined geological reserves of 1,355 mt. The government had allocated 195 coal blocks, with reserves of 43,346 mt, to captive mining companies.

In a meeting today, the IMG, headed by Zohra Chatterji, additional secretary in the coal ministry, decided to recommend bank guarantee deduction for the Tubed block being developed by Tata Power and Hindalco Industries. The block, located in Auranga coalfields in Jharkhand, has 189 mt of reserves.

The IMG had reviewed the progress of the 29 blocks held by private companies in three meetings earlier this month. In the current round of its meetings, the IMG is examining which of these blocks should be recommended for cancellation.

The review comes against the backdrop of Opposition parties demanding Prime Minister Manmohan Singh’s resignation over alleged irregularities in allocation of coal blocks.

In a report tabled in Parliament on August 17, the Comptroller and Auditor General had stated the irregularities had led to a loss of Rs 1.86 lakh crore to the government exchequer.

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