JINDAL POWER MAY LOSE MINING GEAR
The loss of two coal blocks by Jindal Power Limited (JPL), following a Delhi High Court judgment last week, could cause the company to lose around ~170 crore invested in a coal washery and conveyer belt at the Gare Palma-IV/2&3 block in Jharkhand. The court had asked the government to consider setting up a committee for overseeing operations at the mines. The government has decided not to set up the committee. “No committee is needed for this. The high court has clearly supported our stand. Coal India is mining coal from the block. We will not re-auction the mine as currently there is no demand for power sector coal mines,” said a coal ministry official. Another official said the government might ask JPL to dismantle the attached mining infrastructure. SHREYA JAI reports
The loss of two coal blocks by Jindal Power (JPL) following a Delhi High Court judgment last week could cause the company to lose around ~170 crore invested in a coal washery and conveyer belt at the Gare Palma-IV/2&3 block in Jharkhand.
The court had asked the government to consider setting up a committee for overseeing operations at the mines. The government has decided not to set up the committee.
“No committee is needed for this. The high court has clearly supported our stand. Coal India is mining coal from the block. We will not re-auction the mine as currently there is no demand for power sector coal mines,” said a coal ministry official.
Another official said the government might ask JPL to dismantle the attached mining infrastructure. JPL has invested close to ~325 crore in the plant, including a coal washery at a cost of ~100 crore and a conveyer belt at a cost of ~70 crore. The court has given JPL four weeks’ time to take a decision on the infrastructure.
Company executives said their decision would depend on the coal ministry’s stand. “If they ask us to dismantle the infrastructure, we will move court. Transferring equipment to Coal India is out of the question. And the government will find it difficult to re-auction the mine as the bid of ~108/tonne is unlikely to be repeated,” said a JPL executive.
JPL won the Tara coal block in West Bengal and the Gare Palma IV/2&3 block in Jharkhand in e-auctions in February 2015. JPL was the owner of the Gare PalmaIV/2&3 coal block in August 14 when when the Supreme Court cancelled all coal block allocations made over the past two decades. However, the coal ministry did not approve the “comparatively low bids” for these coal blocks. JPL moved the Delhi High Court challenging the government decision. The court held it did not find “any fault with the decision of the government in not declaring JPL as the successful bidder”. The Coal Mining Special Provisions Act, 2015, does not cover infrastructure attached with mines, except the end-use plant. “The Act only covers the power plant. The fate of the washery and conveyer belt as mining infrastructure is not identified in the Act. There is no way we can receive compensation for them. The only recourse is legal,” said the JPL executive. JPL’s power plant near the Gare PalmaIV/2&3 coal blocks is now sourcing coal through e-auctions held by Coal India and its other mines. Gare Palma-IV/2&3 is one of the richest coal mine clusters in the country. The cumulative capacity of these two mines is 155 million tonnes with annual peak rated capacity of six million tonnes, the highest among all coal blocks put up for auction in 2015-16.
The government is unfazed by a legal challenge by JPL. “If they move court, and if they get a stay, it will make no difference to us. The mines stay with Coal India and re-auction is not an option in the near future,” said a coal ministry official.