SC to be briefed on status of 46 blocks

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Govt tries to save 10% of FY15 coal output

SC to be briefed on status of 46 blocks
The government has directed top steel, power and fertiliser companies holding 46 coal blocks to divulge their operational plans and production targets for this financial year.

The data will be compiled by the nodal coal ministry in an affidavit to make out a case for exempting these 46 out of 218 coal blocks from being subjected to re-bidding through e-auctions.

Coal ministry will file the affidavit before the three-judge Supreme Court bench led by chief justice RM Lodha detailing the production of coal expected from these blocks held by both private and state-run companies.

The affidavit follows attorney general Mukul Rohatgi’s submission before the Supreme Court on Monday seeking exemption for the 46 coal blocks that are either operative or nearly operational.

Top companies that are either producing or set to go for production of coal include RPG Industries from the Sarisatolli coal block in West Bengal, Hindalco Industries at Talabira in Odisha, Jindal Steel and Power at Gare-Palma in Chhattisgarh, Prakash Industries’ coal block in Chotia also in Chhattisgarh and Usha Martin with a coal block in Katuria, Jharkhand.

From these allocated blocks, the government expects production of 53 mt during this financial year. This translates into 10 per cent of total coal output in the country during 2014-15 pegged at 550 mt. As per an estimate, captive coal blocks are expected to produce 100 mt by 2017.

A directive sent by the coal ministry on Monday evening to companies holding the 46 coal blocks also sought status of linked end-use plants (EUPs) in power, steel and fertiliser sectors).

The ministry said that production update was required for the affidavit to be filed before the court.

State-owned companies like SAIL (Tasra coal block), Damodar Valley Corporation (Barjora No-rth block), West Bengal Power Development Corporation (Barjore), NTPC, private enterprises like Jaiprakash Associates and Prism Cements are also required to update the coal ministry on production from the blocks allotted to them between 1993 and 2011. Blocks held by these companies are set to commence production by March 2015.

Total coal consumed in 2013-14 was around 566 mt, out of which about 150-160 mt was imported. A major chunk of 452 mt was used to fuel the thermal power plants. In case all the thermal power plants were to operate at 90 per cent plant load factor (PLF), they will need another 165 mt. Right now, their PLF is about 70 per cent.

The Supreme Court will take a call on re-bidding for 218 coal blocks on September 9 after taking into consideration the fresh affidavit that government is in the process of filing to seek exemption with regards to 46 coal blocks held by top corporate entities.

The coal ministry, through separate letters, has cautioned the holders of coal blocks that as the data would form part of government affidavit, “furnishing false information may invite penal action as per law”.

Attorney general Mukul Rohatgi had told Supreme Court on Monday, “We want re-auction of 218 coal blocks. We will be happy if we save some 46 of them which are functional or operational and ready for end use plant.”

Rohatgi’s submission emphasised the need to save these coal blocks from the “guillotine of cancellation” as uncertainty of coal availability would impact steel, power and fertiliser plants. He also pointed to acute shortage of power supply while seeking exemption for these plants.

During the hearing, Rohatgi had said that like 40 operational mines, there were six others that were in “absolutely in readiness” to be operational for EUP.

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