Electrosteel asks for realistic view on coal block de-allocation

Ductile iron pipe maker Electrosteel Castings Ltd has asked the coal ministry and the Inter Ministerial Group to take a realistic view while deciding on de-allocating coal block for failure to develop mine within the prescribed time period. 

As against the date of allotment of a mine, time when the joint venture company formed by those to whom the North Dhadhu coal block in Jharkhand was given should be considered for bench marking of progress on mine development, Electrosteel Castings has asked the IMG during a presentation to defend its case,  and also in a follow-up letter written to additional coal secretary and chairperson of IMG, Zohra Chatterjee.

IMG on Wednesday recommended deallocation of North Dhadhu block given to a consortium lead by Electrosteel, which holds majority 49% stake in the block, with the balance 51% owned by Adhunik Alloys and Power, Jharkhand Ispat and Pawanjay Steel and Power.

Electrosteel Castings claims to be one the serious players to bag a coal mine back in 2006, but only as part of consortium with partners, in whose selection it had no role.

To start with, the block allocated had a river running through it, which makes integrated mining operations extremely difficult. Dividing the block into two parts, to be developed separately by Electrosteel and the other partners, was suggested as a solution.

“The request was turned down only in 2008, and the joint venture between the other partners thrust on us could be formed only after that,” Electrosteel executive director HK Modi said. “Since the proposal of sub-blocking was under the consideration of ministry of coal (MoC), we could not form the joint venture company,” the letter written to Zohra Chatterjee on September 11 said.

To make matters worse, the block remained under the “No-Go” classification of the environment ministry , an area where the government would not permit any mining activity, till October 2011. “This hiatus resulted in loss of more than one year,” the presentation made before the IMG mentioned. Efforts to start mining operations have also been delayed due to refusal of the environment ministry to accept the mining plan, despite approval by the coal ministry, Modi said.