Monnet Ispat may lose the Gare Palma IV/5 block twice over as it prepares to regain the block after the coal ministry served a show-cause notice on Monday.
Monnet Ispat may lose the Gare Palma IV/5 block twice over as it prepares to regain the block after the coal ministry served a show-cause notice on Monday.
The notice was for using coal extracted from its captive mine for purpose other than what was permitted to and pertained to an extended period running into several years.
"Monnet Ispat and Energy is called upon to show cause as to why the use of coal produced from Gare Palma IV/5 in its sponge iron plant at Raigarh should not be held as violation of the terms and conditions of the allotment letter. The reply to this show cause notice may be furnished within three weeks time, failing which, it would be presumed that the company has no reply to offer and the competent authority ministry of coal would take appropriate action including de-allocation of block or suspension of mining by declaring mining lease void without giving any further notice," the ministry said in a letter issued to Monnet on Monday.
But how can Monnet lose a block which has already been taken away from it following Supreme Court order and now put to auction again?
Experts say that any de-allocation due to violation of norms would be just a formality and wouldn't impact Monnet's chances this time.
Monnet is now competing with Ambuja Cement, Bharat Aluminium, Hindalco and Rungta Mines for Gare Palma IV/5.
The allegation against Monnet is that it used captive coal for its power and sponge iron plants at Raipur and Raigarh while permission was issued for use in the former only.
"From the report of Inter-Ministerial Committee it is noticed that the allottee company has utilised more coal in its Raigarh plant compared to Raipur plant. However from the available records in the ministry it is seen from the allotment letter, the said block was allotted for captive mining for supply of coal to sponge iron plant at Raipur. It is observed that at no point of time ministry of coal has given permission to use coal from Gare Palma IV/5 for the Raigarh plant by the allottee company whereas the company has been using the coal mined from the said block at its Raigarh plant also since 2005-6 till the date of submission of report of IMC," the show cause notice said.
As per information shared with the bidders during current auction, Gare Palma IV/5, spread over 828.26 hectares has extractable reserves of 50 million tonnes while balance as on April 2014 was 42.43 million tonnes.
On Monday BS Ispat bagged the Mark Mangli III block having 4.20 million tonne of mineable reserves in Maharashtra quoting Rs 918/tonne out bidding JSW Cement, Sunflag Iron and Steel and also Topworth Urja and Metals, which was the previous owner.
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