CCI forms group on coal supply to steel plants

CCI forms group on coal supply to steel plants

CCI forms group on coal supply to steel plants

The government is trying to fast-track reforms when it has very little window for implementation before 2014 general elections.

The Cabinet Committee on Investment has set up a panel headed by Planning Commission member B K Chaturvedi to recommend ways to supply coal to steel and aluminium projects that have been stalled due to environment regulatory issues.

"The panel will submit the report in one month. The committee has to recommend ways to ensure coal supply to non-power plants that have not able to start production due non-supply of coal for various reasons," a senior official told Deccan Herald.

There are many projects that have not been able to start production either because they have not been allocated a coal block or they have not been allowed to extract coal from their allocated block on regulatory issues.

For instance, Hindalco Industries’ Mahan aluminum project in Madhya Pradesh is facing a fuel crunch. Although the Mahan aluminium smelter is under commissioning and trial production has started, coal output from its block has not yet taken off.

    The Mahan block, with geological coal reserves of around 144.2 mn tonnes was jointly allotted to Essar Power and Hindalco Industries in 2006. Hindalco Industries has written to the coal and power ministries, seeking interim allocation of 3.4 mn tonnes coal from the Northern Coalfields till its Mahan block is ready for mining.

    According to a Cabinet Committee on Investment source, Hindalco Chairman Kumar Mangalam Birla met the panel's officials last week to discuss the issue. "There are many such projects. We have asked the committee to come out with the suggestions primarily of how to ensure coal supply to these projects," a Cabinet Committee on Investment official said.

The Rohne coal block in Jharkhand, jointly allotted to JSW Steel, Bhushan Power & Steel and Jai Balaji Industries has also not started production yet. The block was allotted in 2008. JSW plans to set up a 10 mln tn per annum steel plant in the state along with an 800 MW captive power plant.

Other non-producing coal blocks allocated to steel plants include Rajhara North in Jharkhand and Andal East in West Bengal.