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Jindal Steel & Power and Hindalco have lost between 3.5-4% on the BSE on concerns that the Supreme Court may de-allocate the mines allotted several years ago to both these companies.
As per reports, the Supreme Court may de-allocate the Mahan Coal block allocated to Hindalco eight years ago to feed its aluminium plant in Madhya Pradesh.
In addition, reports suggest that the Supreme Court may de-allocate Jindal Steel and Power (JSPL)'s Utkal B1 block. JSPL needs access to coal from Utkal B1 mine for its steel and power project at Angul in Odisha.
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The Supreme Court in its ruling on 25 August 2014 termed 218 coal mine allocations between 1993 and 2009 as arbitrary and illegal and expresses concerns on the fate of several mines including those of Hindalco and JSPL. Later, the government requested the Supreme Court to exempt 40 producing and six soon-to-be-operational blocks from cancellation and instead impose penalties on the operators for any wrongdoing while procuring them.
The government is in the process of filing an affidavit providing details of 46 mines, requesting the Supreme Court not to cancel their licences. Reportedly, there was no mention of Mahan Coal mine and Utkal B1 mine in the affidavit stoking fears of de-allocation.
