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Even as Aditya Birla group's Hindalco is facing trial in the coal block allocation case for the Talabira II-mine in Odisha in a special court, the Central Bureau of Investigation (CBI) has filed a fresh First Information Report (FIR) and begun a separate probe into diversion of coal from Talabira-I mine.
Sources familiar with the developments said the CBI visited Hindalco's offices in Sambalpur, Odisha and in Mumbai to collect evidence in the case. The CBI has already collected evidence from the coal ministry on Talabira-I mine.
When contacted, a Birla spokesperson said: "As is known the CBI has been investigating coal block allocations made since 1993, under the monitoring of the Supreme Court. With regard to allocation of 15% share to Hindalco in Talabira II & III coal mine, the CBI has already filed their closure report. In continuation with their investigation into 185 coal mines across industry, the CBI has now begun its investigation into Talabira I, a mine allocated in 1994 to the erstwhile Indal, which was later acquired by Hindalco. In this connection, the CBI carried out searches in three of the Company's sites. Already, the Supreme Court has cancelled the allocation of 204 coal mines to all the respective companies. The mines will be auctioned as announced by the Ministry of Coal".
But company insiders said Talabira-I mine was allocated to Indal (the company was later acquired by HIndalco) in 1994 soon after the government opened up the coal sector for private sector investment. The coal mine was allocated to Indal for the expansion of its 67.5 mw captive power plant which was till then buying coal from Mahanadi Coal's mine situated 400 kms away & adding to cost and wastage of coal during transit. The Talabira-I mine was situated just next to the plant and the company took all necessary permission from the government to use the coal for its use, said a legal source. The company, in fact, doubled the capacity of the Talabira-I mine at a time when other miners could mine only 5 per cent of total capacity, the source said.
Hindalco took over Indal in 2000 from Canadian metal giant Alcoa and, four year later merged the company with itself. The power plant's capacity was increased to 467 mw and is supplying power to Hindalco's Hirakud plant. The production of coal from Talabira-I began in 2003.
A source said the allegation of diversion of coal against Hindalco to the then existing plant is not correct as the company did not start production at the site due to multiple reasons including lack of environment clearances and due to fire hazard. Once the clearances came in, the company started production and used it to produce power for its own unit. The capacity was increased later as production was ramped up at the site.
In fact, the trial court judge Bharat Parashar hearing the Talabira-II coal block allocation, has made a reference to the coal diversion by Hindalco from Talabira-I mine saying a separate CBI probe is already going on in the diversion of coal which was allotted to the Birla company for commission of their existing plant.
The judge said Hindalco deliberately did not pick up coal from Mahanadi Coal as per the coal linkage already provided to them since it was not beneficial to them and secondly their purpose in the existing end use plant was being served by illegally diverting coal from Talabira-I coal block, which was allotted to them for expansion of their existing plant.
The judge said he is not entering into any further discussion on this (illegal coal diversion) aspect as it has been informed by CBI that a separate FIR in this regard has already been registered against Hindalco by CBI.
However, a reference to the aforesaid issue is being made only to highlight the fact that the earlier linkage provided to Hindalco from Mahanadi Coal Ltd (MCL) was not being taken use of as it was not cost effective to Hindalco. It was in these circumstances imperative for Hindalco to obtain yet another captive coal block for their use, the judge noted in its order.
Thus, the claim of Hindalco as noted by the former coal secretary P.C. Parakh (and an accused in the coal scam) in his note dated 08/11 August 2005 that in view of the current shortage of coal in MCL area, MCL will not be in a position to honour earlier linkages given for their aluminium plant was also wrong, the judge said.
On the Talabira II case, the company is planning to move the Supreme Court to stay the summons issued to Chairman Kumar Mangalam Birla and its managing director, Debu Bhattacharya. The company has hired senior lawyer, Harish Salve to appeal to the Supreme Court.
Facing a new storm
- CBI files second FIR against Hindalco
- FIR for diversion of coal for expansion at Talabira-1
- Hindalco allegedly used coal to expand own power capacity
- CBI visits Hindalco offices to collect evidence
- Hindalco says it took all permission from govt for mining
