New Delhi: Sajjan Jindal-led JSW Steel’s move to acquire a coal block in Jharkhand seems to have run into trouble with Jai Balaji Sponge Ltd, one of its joint venture partners, walking out of the proposed consortium.
“The Rohne Coal Block in Jharkhand was allocated to a JV company floated by JSW Steel, Bhushan Steel and Power Ltd and Jai Balaji Sponge Ltd. But Jai Balaji walked out of it, prompting the steelmaker to seek the Coal Ministry’s help in this connection,” official sources told PTI.
The Coal Ministry had asked the JV company to submit a legally tenable agreement by May this year. But none of Jai Balaji’s representatives participated in any of the meetings to form the JV company and the project was getting delayed, sources said.
The JV company was aiming to extract 230 million tonnes of coal from the block for their 900MW captive power plant.
When contacted, JSW finance director, Seshagiri Rao, denied Jai Balaji had walked out of the joint venture company,insisting it was still a partner in the JV.
Sources said JSW has also represented before the Screening Committee of the Ministry to seek Amrakonda-Murgadangal and Mahuagarhi coal blocks in Jharkhand.
While the company’s Jharkhand plans appear to be in trouble, in neighbouring West Bengal the Left Front government has recommended a coal block to meet the requirements of its proposed 10 million tonnes a year steel plant.
Impressed by the company’s promised investment of Rs35,000 crore for the project, the state government has recommended the Sitarampur coal block under the state dispensation route to West Bengal Mineral Development and Trading Corporation.
Meanwhile, the country’s biggest miner, NMDC, posed another problem for JSW by refusing to entertain its request for dedicated iron ore supply from the Kumaraswamy mines in Karnataka for its Vijaynagar plant in that state.
“NMDC has made it clear that as a merchant mining company, it cannot dedicate its entire production from the mine to one customer. This is to maintain flexibility of operations to meet the needs of various customers,” a top Steel Ministry official said.
The public sector mining firm has also expressed inability to ensure adequate ore for the steel company from its Donimalai mines saying the needs of the existing domestic and international customers were being met from the said site.
“Kudremukh Iron Ore Company Ltd, consequent to closure of its mine is heavily dependent on NMDC. Moreover, companies like VISL, SJK, KISCO, SISCOL and Lanco also depend on it for meeting at least part of their needs,” the official said.
He said some customers were sourcing ore from NMDC even when the commodity cycle was low.
When contacted JSW Steel executive director (commercial) Vinod Naval said over telephone from Bellary his company had sought ore linkage from NMDC’s Kumaraswamy mines. He pointed out that currently JSW was getting two-and-half million tonnes from it and was asking for more than 4 million tonnes.