The prospects of the world’s biggest steelmaker ArcelorMittal in Jharkhand is getting more uncertain than ever. Already struggling to set up a 10 million tonne greenfield project in the state, the company has now been served an ultimatum by the coal ministry to immediately develop the Seregarha coal block failing which it risks de-allocation. The Seregarha coal block, located in the command area of Central Coalfields Limited, was allocated to ArcelorMittal and Hyderabad-based GVK Power Limited (Govindwal Sahib) on January 9, 2008 to help them meet their fuel needs for their captive power plants. They were mandated for prospecting or exploration preparation would have to be completed within 27 months, while production from the block would have to commence within 36 months from the date of allocation.
“While allocating the block to them, we had made it clear that they risked de-allocation if the milestones were not met and if the progress on the ground was found to be less-than-expected,” a senior coal ministry official said. In a review meeting with both these companies in October 2008, the coal ministry conveyed its displeasure on the unsatisfactory progress being made by the companies, who by then had formed a joint venture for the coal block in the name of Seregarha Mines Limited.
In June 2009, the firms were again told that they were lagging behind the stipulated milestones, including failing to obtain a prospecting licence, “which symbolised their lack of seriousness in developing the block and were told to expedite their work.”
“Following another review meeting in July last year, we told them that despite repeated assurances they were not serious in developing the block. Based on the recommendations of the review committee, we issued them a show-cause notice,” the official said.
In its letter the Seregarha Mines Limited replied to the show case notice, which the review committee “found unconvincing.” “The allocatee is hereby warned and directed to develop the block without any delay. Any further failure in development of the block would lead to necessary action...,” the coal ministry told the company in its letter on June 28, 2011.
L N Mittal’s company is also struggling to secure green clearance for its Karampada iron ore mines in Jharkhand’s West Singbhum district, where according to the ministry of environment and forests (MoEF), an elephant corridor exists. This is another reason which puts the fate of the Rs. 40,000 crore project at stake.
The MoEF has also asked ArcelorMittal, to shell out 5 per cent of its total project cost, or about Rs. 1,500 crore towards discharging corporate social responsibility in its proposed Karnataka project. This is part of the stringent terms of reference set by the ministry before Mittal’s company sets up a six million tonne greenfield steel plant worth nearly Rs. 30,000 crore at Kuditini village near Torangallu in the Bellary district of Karnataka.
“While allocating the block to them, we had made it clear that they risked de-allocation if the milestones were not met and if the progress on the ground was found to be less-than-expected,” a senior coal ministry official said. In a review meeting with both these companies in October 2008, the coal ministry conveyed its displeasure on the unsatisfactory progress being made by the companies, who by then had formed a joint venture for the coal block in the name of Seregarha Mines Limited.
In June 2009, the firms were again told that they were lagging behind the stipulated milestones, including failing to obtain a prospecting licence, “which symbolised their lack of seriousness in developing the block and were told to expedite their work.”
“Following another review meeting in July last year, we told them that despite repeated assurances they were not serious in developing the block. Based on the recommendations of the review committee, we issued them a show-cause notice,” the official said.
In its letter the Seregarha Mines Limited replied to the show case notice, which the review committee “found unconvincing.” “The allocatee is hereby warned and directed to develop the block without any delay. Any further failure in development of the block would lead to necessary action...,” the coal ministry told the company in its letter on June 28, 2011.
L N Mittal’s company is also struggling to secure green clearance for its Karampada iron ore mines in Jharkhand’s West Singbhum district, where according to the ministry of environment and forests (MoEF), an elephant corridor exists. This is another reason which puts the fate of the Rs. 40,000 crore project at stake.
The MoEF has also asked ArcelorMittal, to shell out 5 per cent of its total project cost, or about Rs. 1,500 crore towards discharging corporate social responsibility in its proposed Karnataka project. This is part of the stringent terms of reference set by the ministry before Mittal’s company sets up a six million tonne greenfield steel plant worth nearly Rs. 30,000 crore at Kuditini village near Torangallu in the Bellary district of Karnataka.
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