Big ticket investors who have committed huge money on their proposed end-use projects, banking on the allocated coal blocks in the state, are now staring at further delay.
Already facing a time overrun due to bureaucratic slow movement of the coal block files, the state government decision to completely put a halt to processing of all such matter in the light of CBI probe against some companies and the latest Talabira-II coal block row has come as a dampener for the investors.
In the anguished list of investors are some of the big corporate players- Jindal Steel & Power Ltd (JSPL), National Aluminium Company (Nalco), Indian Metals & Ferro Alloys Ltd (IMFA) and Monnet Ispat & Energy. All these developers have gained significant strides in implementation of their projects after winning the coal blocks, with the blocks either at ML (mining lease) or prospecting license (PL) stage.
The Ramchandi coal block allocated to JSPL is crucial to the commissioning of its coal-to-liquid project planned near Angul at an investment of Rs 60,000 crore. The project was to be implemented by Jindal Synfuels Ltd, a 100 per cent JSPL subsidiary.
While the Naveen Jindal controlled firm was expecting to start work on developing the Ramchandi block by the end of the year, the latest decision of the state government has proved a setback.
The draft memorandum of understanding (MoU) to be signed with Jindal Synfuels is ready. As per the project plan, the CTL project would have a capacity to produce 80,000 barrels per day. This includes 50,000-55,000 barrels of diesel per day, 20,000-25,000 barrels of naphtha and 4,000-6,000 barrels per day of LPG
Similarly, the lease deed of the Utkal B-1 block granted to JSPL for a steel and power complex two years back is yet to be executed by the state government. This coal block is crucial for the company's two million steel plant and associated 810 Mw power plant which are now ready for operation with an investment of Rs 18,000 crore.
Nalco was allocated the Utkal-E coal block in August 2004 to meet the coal requirement of its captive power plant at Angul. It was imperative to start mining from this coal block since the company had no linkage and had to procure coal through e-auction or imports at much higher cost than captive production, affecting viability of its aluminium production.
Nalco has achieved major milestones like approval of mining plan, consent to establish, wildlife clearance, environment clearance, prior approval of mining lease and permission of water drawl. The navratna company has also incurred an expenditure of Rs 118.72 crore till the end of 2012-13.
A host of other allocatees across sectors like power, cement, aluminium and sponge iron are also destined to suffer due to government inertia on processing of coal block applications.
The coal ministry had allocated 32 blocks for captive utilisation between 1993 and 2013. Of this, only the Talabira-I coal block allocated to Aditya Birla Group owned Hindalco Industries has gone into production.
