Coal news and updates

Essar Power coal block deallocation put on hold

The government has put its decision to de-allocate two coal blocks awarded to Essar Power on hold as the company has obtained an interim court order against possible de-allocatin of the Chakla and Ashok Karkatta blocks it holds.

The Inter-Ministerial Group (IMG) recommended de-allocation of Chakla block saying the company had not obtained forest and environment clearances. For the other block, the IMG observed that Essar Power had neither applied for forest clearance nor explored the Ashok Karkatta block. An Essar executive declined comment as the company had not heard from the ministry yet.


The decision follows coal ministry's move to review 61 blocks that have not started production. The review is in line with its submission before the Supreme Court that it is hearing a case on alleged malpractices in the process of coal block allocations. The Central Bureau of Investigation is investigating the process of coal blocks allocated between 1993 and 2010 after a CAG reported criticised the government for giving away coal worth Rs 1.86 lakh crore.


The power ministry, which is represented on the IMG, had argued that Essar Power had invested over Rs 3,257 crore for the end-use plant banking on coal to be produced from Chakla block and Rs 245 crore for project based on coal from Ashok Karkatta block. This week, the government took the decision to de-allocate blocks of many firms including Arcelor Mittal, Hindalco, Tata Power, Reliance Energy, GMR, Lanco, Jindal Steel, Sterlite. However, it has decided to put its decision on hold for the firms which have already received interim orders from the high courts.

Separately, IMG will review the status of progress of 10 more blocks during its meet scheduled on February 25. These blocks are allocated to Essar Power, Tata Steel, JSPL, JSW Steel and DB Power among others.

Source: The Economic Times