The 42 coal blocks, which have been allowed to remain operational for another six months to maintain continuity in coal supply to various projects, account for 10 per cent of the country’s total coal output and are crucial for power and steel production.
These blocks, over the past few years, have been mostly feeding fuel to companies in Chhattisgarh, Jharkhand and Orissa. While some of the blocks are operated by private companies, a sizable number are run by state owned entities.
Out of total 46 blocks, which have been allowed to remove coal for six more months by the Supreme Court, 42 are functional and remaining four are ready to commence operations. The 42 functioning blocks are producing coal to the tune of 53 million tonnes and account for 10 per cent of the total coal produced in the country, a Coal Ministry official told Deccan Herald.
The apex court verdict may lead to some disruptions in coal supply as mining from these blocks will be hampered, further exacerbating the coal shortages in the country, the official said. Naveen Jindal’s JSPL and Aditya Birla Group's Hindalco would be among the worst hit private sector companies, say officials.
Jindal Steel and Power (JSPL) was allocated six blocks for its sponge iron plants and 1,000 MW power plant. Its entire 12-million tonnes coal production comes from mines allocated since 1993. The de-allocation would further delay the process of securing mining rights for its much awaited Utkal B-1 mine, critical for its Angul steel-cum-power project.
Hindalco was allocated Talabira-I block in Odisha in 1994, Talabira-II in 2005 in a joint venture (JV) with Coal India/Neyveli Lignite and Mahan in Madhya Pradesh in 2006.
Hindalco’s Talabira-I mine yields 2.5 mtpa coal to meet around one-third of its requirement. The de-allocation of block would put a question mark on its greenfield 3.59 lakh tonne smelter at Mahan which was allocated a captive mine in JV with Essar power.
State-owned aluminium maker Nalco will also be affected as its Utkal-E block in Odisha, allocated in 2004, has been scrapped.
Tata Steel’s Kotre-Basantpur and Pachmo mines (Jharkhand) were allotted in 2005, but they are not operational now.