IMG Deallocates Eighth Coal Block, Plan Panel for Privatising Mining

New Delhi: The inter-ministerial group (IMG) on coal block allocations recommended de-allocation of Macherkunda block and deduction of bank guarantees of the Jitpur block and Chitarpur coal block in Jharkhand. Macherkunda block was allocated to Bihar Sponge Iron in August 2008, while Jitpur block in Jharkhand was allocated to Jindal Steel and Power in February 2007. Chitarpur North was allocated to Corporate Ispat. The government also deallcoated three more coal blocks on the recommendations of IMG's review last week. These blocks include one alloted to SKS Ispat and Power in which Tourism Minister Subodh Kant Sahai's brother allegedly had a link, and another jointly alloted to Jindal Steel Works. The IMG had recommended deallocation of three blocks - Gourangdih ABC Coal Block allotted to Himachal EMTA Power and JSW Steel, Rawanwara North Coal Block allotted to SKS Ispat and Power and New Patrapara Coal Block allotted to Bhushan Steel. The government approved deduction of bank guarantees in the cases of Nerad Malegaon Block jointly allotted to Gupta Metaliks and Gupta Coalfields, Lohari block allotted to Usha Martin, Radhikapur East coal block allotted to Tata Sponge Iron and others, and Bijahan Coal Block allotted to Bhushan. With this, the total number of coal blocks deallocated by coal ministry due to insufficient progress rose to seven. The IMG is currently reviewing coal block allocations which has provoked a major political storm. The four blocks whose allocations were cancelled last week are Bramhadih Block in Jharkhand allocated to Castron Mining Ltd in 1996, Chinora and Warora (southern part) blocks in Maharashtra given to Fieldmining and Ispat in 2003 and the Lalgarh (North) block in Jharkhand allotted to DOMCO Smokeless Fuels in 2005. Meanwhile, Planning Commission has called for privatisation of coal mining, saying government should have a consistent policy for the energy sector as third party sale is allowed for petroleum and natural gas in the country. "The policy for energy sector should be consistent. We have not nationalised petroleum and natural gas. Private sector investment for third party sale is freely allowed in oil and natural gas. Therefore to my mind, the logic is very clear that it should be allowed (for coal)," Planning Commission Deputy Chairman Montek Singh Ahluwalia told mediapersons on the sidelines of an event in the capital Coal mines were permitted to be allocated for captive use after the sector was nationalised in 1970s. No third party sale of coal is permitted. India's official auditor had recently estimated a notional loss of 186,000 crore ($33.67 billion) to the exchequer on account of not auctioning coal blocks allocated to private allottees. The Comptroller and Auditor General's (CAG) report, tabled in parliament, names 25 companies including Essar Power, Hindalco, Tata Power and Jindal Steel and Power, which have got the blocks in various states.