* Tata group , Jindal Steel, Adani Power among those whose
coal blocks reclaimed
* Coal ministry reviewed coal blocks that have not started
* Jindal says will take government to court over move
By Krishna N Das and Jatindra Dash
NEW DELHI/BHUBANESWAR, India, Feb 19 India's
coal ministry is taking back 31 coal blocks allocated to private
firms including the Tata group and Jindal Steel and Power
over delays in developing them, jeopardising
billion-dollar projects and inviting warnings of legal action.
The ministry, reviewing some 61 coal blocks allocated over
the past decade that have not started production yet, announced
on Tuesday it is reclaiming about half as companies have failed
to meet milestones. The companies say delays in getting some
government clearances hampered work on the blocks.
"The ministry has already sent notices to a number of
companies about the de-allocation," coal ministry spokesman N.C.
Joshi said on Wednesday. "Some others will be intimated soon."
The Tata group, in partnership with South Africa's Sasol Ltd
, was planning to invest $10 billion in a project to
convert low-quality coal into oil starting 2018. Jindal Steel
too was working on a similar project and had spent about $12
million out of total planned investment of $10 billion.
The government periodically reviews the status of coal
projects and has previously also reclaimed allocated blocks. The
de-allocated blocks will be given to state-owned Coal India Ltd
for the time being and may later be offered to new
developers, Joshi said.
Jindal Steel, whose chairman Naveen Jindal is a Member of
Parliament from the ruling Congress party, said it will take the
government to court for the decision to take back the Ramchandi
block in eastern Odisha state.
Rajani Kant Singh, the steel and mines minister of Odisha
where the Tata-Sasol block is also located, called the federal
government's move "unfortunate" as it came at a time when
"procedural maintenance was underway".
Jindal Steel was allocated the block in early 2009 for it to
produce 80,000 barrels of oil per day. The Tata-Sasol venture
was also planning to ramp up output to 80,000 barrels per day
within a year from starting, a Sasol executive said in 2010. (r.reuters.com/dux86v)
"Jindal Steel opines that it is the most unfair decision," a
company spokesman told Reuters. "We'll challenge this decision
in a court of law."
The spokesman declined to give a timeline by when the
company will approach a court. A spokeswoman for the Tata-Sasol
venture did not immediately comment on the fate of the project.
Jindal Steel's shares closed up about 7 percent on Tuesday
because investors were relieved that a big capital-intensive
project was likely to be cancelled following the de-allocation,
said Angel Broking analyst Bhavesh Chauhan. The Jindal Steel
spokesman declined to comment on the fate of the coal-to-liquid
Chauhan said that only a handful of companies whose coal
blocks will be taken away have invested in the projects, which
means there would not be much of an impact for investors.
Apart from the companies working on the coal-to-liquid
projects, Adani Power Ltd is one of the large
companies whose coal blocks will be taken back. An Adani
spokesman could not be reached immediately for comment .
($1 = 62.2275 Indian rupees)
(Editing by Muralikumar Anantharaman)