NTPC, ArcelorMittal, GVK Power, Jindal Steel & Power, Damodar Valley Corporation and GMR Energy

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are among 97 companies that will be issued notices asking them why captive coalmines allocated to them should not be taken back for their failure to develop or work these mines.

The companies were allocated a mine each, and together these mines have coal and lignite reserves of 49 billion tonnes. Of the companies allocated coalmines, 45 are government-owned and 48 are in the private sector. Four companies were allocated lignite mines.

The defaulters read like a who’s who of India Inc. Besides the names mentioned above, they include Tata Steel, Tata Sponge, Essar Power, MMTC, Monnet Ispat, Bhushan Steel & Power, Chhattisgarh State Electricity Board, Hindalco, Sterlite Energy and Lanco Infratech.

Most of the mines were allocated as far back as in 2003 and 2004 but the companies have either not developed them at all or are not working them. Utkal Coal was awarded a block way back in 1998 which remains undeveloped.

Coal minister Sriprakash Jaiswal told Financial Chronicle that his ministry would soon send notices to these companies.

“Some companies are sitting on blocks for 12 years when others are facing severe coal shortages. Coal belongs to the nation and it is not a personal asset of these companies. We are going to send showcause notices to all the defaulters,” he said.

A government official said notices would also be sent to companies failing to achieve production targets for lack of environment and forestry clearances. As per guidelines, if companies are not able to secure the environment ministry’s nod, they should inform the coal ministry in writing. There is no policy to award coal blocks in lieu of those facing green hurdles, but the coal ministry is bound to withdraw the allocation of such blocks and issue fresh ones in the next round of allotment.

An NTPC official who did not want to be named said it could take up to five years to begin mining a block. He said delays were unavoidable and caused by lengthy government procedures.

The coal ministry’s guidelines require an opencast mine to become operational within 36 months after its award. For underground mines the time limit is 48 months. An additional six months is allowed if a block lies in forest area.

The decision to issue showcause notices follows review meetings held by additional secretary Alok Perti on July 20-21. Till date the government has awarded 207 captive coal blocks. Of 96 blocks awarded to government companies, only 12 are in production. Only 14 of 99 blocks awarded to private sector companies are operational.

A total of 28 lignite mines have been awarded to private and state-owned companies. Of these only 11 are in operation.

The ministry is peeved at the slow progress. Only 30 million tonnes of coal was extracted from captive blocks in 2009-10 against a target of 81 million tonnes.

In August last year the ministry had issued showcause notices to about 40 companies. Subsequently, licences to six were cancelled and bank guarantees of six others forfeited. The ministry has so far revoked the allocation of 11 blocks.

The ministry has also issued advisories to 23 government and private sector companies to develop blocks at the earliest to avoid revocation. An advisory was issued to even the power ministry to expedite work on blocks allocated for ultra mega power projects.