Govt threatens to cancel coal block allotted to Binani Cement

"Your company has not only violated the government orders but also seems to be not interested to develop the block as per the milestone chart and terms and conditions of the allocation... The progress is not satisfactory and your company seems to be a non-serious player," the coal ministry said in a showcause notice issued to the company.

Binani Cement said it has already sought time from the government for assessing the viability and feasibility of the block as the decision to acquire the block rests on the report indicating the quality of coal.

The coal ministry served notice on September 29 to the company and sought its reply within 15 days, seeking reasons for the delay in developing the mines allotted for captive use, failing which the process to de-allocate the block would start.

The company has also failed to submit a bank guarantee amount of Rs 5.86 crore to the ministry in the stipulated time frame, it said. Also, it added that the company has not even applied for any mining related licence with the state government till now. Earlier, the government had issued notices to ArcelorMittal and MMTC warning cancellation of blocks alloted to them for failing to develop the mines.

"In spite of the passage of almost 12 months, no serious effort has been made by your company to develop the coal block as per the milestone chart appended to the allotment letter. Consequently, the development of the coal block has been inordinately delayed," the letter added.

Asking the company to reply within the stated timeframe, the ministry said, "...failing which it will be presumed that your company (Binani Cement) has no explanation to furnish and action as appropriate will be taken against your company for de-allocation of Datima coal block."

When contacted a Binani Cement spokesperson said, "We have sought time from the Ministry as we are in the process of assessing the feasibility and viability of the coal block which is likely to be completed by December." "Based on the findings of the geological experts deputed by us we will take a final decision whether to acquire the block or not.

"If the block contains coal with high ash content, we may not go for acquiring it as presently we have to import coal valued at about Rs 500 crore per annum from countries like Indonesia to meet the requirements of our plants as ash content is very high in the Indian coal," the spokesperson added.