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JSPL opposes change in end use norms of coal

Coal Ministry has earmarked 101 coal blocks for e-auction including 18 blocks in Odisha

Naveen Jindal controlled Jindal Steel & Power Ltd (JSPL) has opposed any change in the end-use specifications of coal blocks earmarked for auction after the Supreme Court cancelled the allocation of 204 coal blocks in August this year.

In a recent notification, the Ministry of Coal has earmarked 101 coal blocks for e-auction including 18 blocks in Odisha.

Nine out of 18 blocks would be allocated to the government companies and the balance is meant for the private players. Out of the blocks for the private players, eight are reserved for the private power producers while only one is earmarked for the non regulated sectors including steel, cement and aluminium.

"Earlier, eight out of nine coal blocks were for the steel plants and captive power plants and one was for the power plant. But in the December 18 notification, it is reversed. Now, eight blocks would be allocated for the power plants and the balance to other sectors like steel and aluminium. We have already invested about Rs 21,000 crore at our steel plant at Angul on the basis of Utkal B1block  allocated to us. We want that the end-use projects of the coal block should not be changed, otherwise investments made at the steel plant will be sick," JSPL Chairman Naveen Jindal told media persons after meeting the state chief secretary GC Pati and steel & mines secretary R K Sharma here.

"We have requested the state government to pursue the matter with the Union government," he added.

With the change in end-use conditions, JSPL will not be in a position to bid for the Utkal B1 block which is about five km from its steel unit in Angul.

It may be noted that the Utkal B1 coal block, with an extractable coal reserve of 150 million tonne, is among the 204 blocks cancelled by the Supreme Court in August.

JSPL is setting up six million tonne per annum (mtpa) integrated steel plant at Angul.

"Steel plant can create at least 15 times more employment and requires four times more investment than that of power plant. Allocating the coal block for steel plant will bring more economic development," he said.

The steel maker is running its plant at about 50 per cent capacity and meeting its raw material requirement mostly by importing coal and iron ore.

He said that steel industries like Bhushan Steel and Tata Steel are also likely to be impacted.

Dharmendra Pradhan, Union minister of petroleum and natural gas, however, said, price mechanism adopted for the coal blocks for the power sector and steel sector will be different. While the power production price is regulated by the regulatory commissions, the steel prices are linked with market without any regulatory control. So, the price mechanism is different for steel and power sectors, Pradhan added.

Source: Business Standard