Coal news and updates

Nalco to file review petition in SC over quashing of coal blocks

Company looking for acquisition of coal properties abroad...

Stung by the recent Supreme Court (SC) order, which quashed allocation of 214 coal blocks across the country, National Aluminium Company (Nalco) said it is mulling to file a review petition in the apex court to reconsider its case for Utkal-E, a coal block awarded to the aluminium major that now stands de-allocated.

“As per the SC order, the Utkal-E coal block also stands cancelled. We are consulting our lawyers and in all likelihood, Nalco is going to file a review petition in the apex court. We will request the court to reconsider our case and will explain the reasons for delay in developing the block. Some of the reasons for the delay were beyond our control”, said Nalco chairman cum managing director (CMD) Ansuman Das at a press briefing here.

Das said, Nalco fulfills both the criteria laid down by the top court for allowing operations of the four coal blocks. Out of 218 coal blocks allocated between 1993 and 2010, the top court had allowed four blocks to operate while scrapping 214 others.

Nalco is a PSU. Also, it has not entered into a joint venture with any private company, he reasoned.

The Nalco CMD said the company has invested over Rs 100 crore on the Utkal-E coal block and 60-70 per cent of land for developing the block has already been acquired.

Nalco was given the Utkal-E coal block in August 2004 to meet the coal requirement of its captive power plant at Angul. But delay in land acquisition and obtaining statutory clearances had slowed its progress.

The aluminium major was desperately looking to secure a coal block for its operations since getting the dry fuel via auctions from Coal India controlled mines or imports was not viable.

It had kept its second smelter project in the state proposed in Sundargarh district on hold due to unavailability of a coal block.

But with an appreciation in aluminium prices on the LME (London Metal Exchange) and decline in valuations of coal assets abroad, Nalco has stepped up the hunt to secure a coal block outside Indian shores.

“If we can source coal from overseas, it will be better for us. We are scouting for coal properties in countries like Malaysia, Indonesia, Vietnam, Qatar and Iran. Nalco is looking at a coal availability of 20 years and Iran has shown a lot of interest. We will get things worked out by a consultant on our overseas coal hunt”, Das said.

Amid deepening uncertainty in coal availability in the domestic market, Nalco has renewed its efforts to set up a smelting facility abroad. Though the company had initiated some steps in this regard few years back and even set up an office in Indonesia, things have not progressed much.

As of now, five countries have been shortlisted considering various factors like shipping distance from India, availability of required quantum of energy and price viability, geo-political scenario and availability of infrastructure. A consultant is being appointed shortly for ascertaining the best possible destination for the project”, Das said in his speech at the 33rd annual general meeting (AGM) of the company.

Nalco has declared a total dividend of Rs 387 crore for 2013-14.

Source: Business Standard