Gujarat Ambuja, Grasim may lose coalfields

IMG to meet in October to decide on the future of coalfields owned by govt companies
Comment E-mail Print Share
First Published: Thu, Sep 20 2012. 04 21 PM IST
IMG recommended the cancellation of Dahegaon/Makardhokra IV field allocation in Maharashtra. Photo: AFP
IMG recommended the cancellation of Dahegaon/Makardhokra IV field allocation in Maharashtra. Photo: AFP
Updated: Fri, Sep 21 2012. 03 31 PM IST
New Delhi: The inter-ministerial group (IMG) looking into coalfield allocations on Thursday recommended taking back blocks from Grasim Industries Ltd and Gujarat Ambuja Cement Ltd, a coal ministry official said.
The panel recommended the cancellation of the Dahegaon/Makardhokra IV coalfield allocation in Maharashtra, the official said, declining to be identified.
The ministry’s list of allottees shows the coalfield is held by Gujarat Ambuja Cement with Lafarge India Pvt. Ltd. and IST Steel and Power Ltd. The coal was meant to be used in cement-making.
The second coalfield allocation recommended for cancellation is Bhaskarpara in Chhattisgarh, which, according to the ministry’s list, belongs to Grasim Industries and Electrotherm (India) Ltd.
“Although we cannot comment on this as we have not received a formal notification from the government of India, Lafarge India followed the processes specified by the government, while applying for the coal block,” Grasim Industries company spokesperson said.
“We have learnt through the media of IMG’s recommendation to deallocate the coal block jointly allotted to Ambuja Cements Ltd along with Lafarge and IST Steel. However, we have not received any formal communication from the coal ministry nor aware of the reasons behind this deallocation,” Ambuja Cements said in an email. “This recommendation made by IMG is unfortunate; given the fact that we pro-actively followed all processes specified by the government and had made very good progress on the same. Neither has this recommendation been made on merit—especially since we made a presentation before IMG explaining our case and reported the progress in successfully achieving all mandatory milestones.”
The group of government officials will meet in October to decide on the coalfields owned by government companies that form a part of a list of 58 blocks that were served show-cause notices and was reviewed by the panel.
A show-cause notice is not an indictment. It’s a notice asking a company to explain its position on a specific issue.
The move to revoke coalfield allocations coal mines was “good” since these companies have not made any investment in these place, said Rajesh Kumar Ravi, a Mumbai-based cement analyst with Karvy Stock Broking. “The cancellation of these blocks will have no real impact on the financials of the companies as the markets had not factored the projected benefits from these blocks.”
So far, the group has recommended cancelling allocations of 13 coalfields and forfeiture of bank guarantee of 12, most of which has been accepted by coal minister Sriprakash Jaiswal.
The panel was formed earlier in the year but started reviewing and taking action against coalfield owners after the Comptroller and Auditor General of India submitted a report to Parliament on 17 August alleging a notional loss of Rs.1.86 trillion on account of coalfield allocations.
The government allocated 195 coalfields to 289 companies between 1993 and 2011 to boost production and meet demand from increasing industrialization, but only 30 of these are producing coal.
The rest are stuck in various levels of clearances, and some of the coalfield owners also lacked financial and technical abilities, coal ministry officials have said.
Comment E-mail Print Share
First Published: Thu, Sep 20 2012. 04 21 PM IST
More Topics: Coal | Blocks | Cancellation | IMG | Gujarat Ambuja |