Coal ministry warns of de-allocation of coal block to big companies

The coal ministry has given a strict warning to six large business groups for the inordinate delay in developing the Rampia coal block allotted to them.

The coal ministry yesterday threatened with cancellation the allocations of the block being jointly developed by ArcelorMittal, Reliance Energy, Lanco Group, GMR Energy, Navbharat Power and Vedanta subsidiary Sterlite Energy.

The Rampia and Dip Side of Rampia coal block, located in Mahanadi Coalfields in Orissa, was allocated to the six firms in January 2008 to help them meet their captive coal requirements. Production from the block was to have commenced in January this year as per the terms of the allocation.

''The allocates are hereby warned and directed to develop the block immediately. Any further delay would lead to necessary action including de-allocation of the block,'' the ministry said in a warning letter issued to the six firms.

The allocation letter also stipulated that allocation of the coal block may be cancelled on grounds of unsatisfactory progress in the development of coal mining project or implementation of their end use projects.

In order to expedite the development of coal blocks, review meetings were held periodically by the coal ministry with representatives of the allottee companies. In two review meetings held in June 2009 and July 2010, the ministry noted that no serious efforts were taken by the companies to develop the coal block despite repeated assurances by them.