Coal news and updates

SLC-LT takes stand on sponge iron, cement LoAs

November 11: The Standing Linkage Committee – Long Term (SLC-LT), at its recent meeting, has taken to a decision to keep at abeyance for three months receipts of fresh applications from the sponge iron and cement sectors for granting of letters of assurance (LoAs), post which the matter would be reviewed, an official release has informed.        

In the case of unprocessed applications, it has been recommended that the fees from the developers should be deposited to the government account but the processing of these applications should be kept in abeyance.

Whenever it would be decided to accept fresh applications for granting of LoAs, these will get precedence over fresh applications, it is learnt.

At present, 391 and 164 applications are pending with the Ministry of Coal for granting of LoAs to the sponge iron and cement sectors respectively.

However, because of the negative coal balance of the Coal India subsidiaries and the fact that these companies have to honour the existing LoAs, it was decided to follow the same route taken by SLC-LT with regard to the power sector at a previous meeting in 2013. That is, fresh LoA applications be kept in abeyance for two years and then be reviewed. And with regard to unprocessed applications, it had been decided that the fees should be deposited with the government but the processing of the applications be kept in abeyance. But whenever there would be a decision to accept fresh applications, the unprocessed ones would get precedence over new ones.

Meanwhile, new LoA applications have poured in from both the sectors while the demand drafts received with the applications as processing fees have also lapsed.

Thus, it was imperative for the SLC-LT to arrive at a decision at its latest meeting held in September.