Delhi HC directs govt to halt auction of 2 former coal mines of Jindal Steel

The Delhi High Court on Wednesday asked the government to put on hold the auction of two coal mines attached to a Jindal Steel and Power (JSPL) steel plant, a move that could prompt more companies to go to court and potentially derail plans to auction over a hundred coal blocks before the end of the current financial year on March 31, 2015.

The Delhi HC directed that the Utkal B1 and B2 mines, which the government had consolidated for the purpose of the auction, be demerged and taken off the auction.

Jindal Steel had challenged the government's decision to change the end-use of its Gare Palma IV/6 and Utkal B1 and B2 mines in the states of Chhattisgarh and Odisha, saying it had invested more than Rs 30,000 crore (US $4.80 billion) in setting up plants fed by the mines.

Jindal Steel CEO Ravi Uppal told a local television channel that the two mines can produce about 9 million tonnes of coal annually.

"We are optimistic that the technical committee will consider the merits for end use of coal blocks as envisaged earlier," Jindal Steel, which was the worst hit by the coal block ruling, said in a statement late on Wednesday.

Following a Supreme Court ruling in October that cancelled 214 coal blocks, the government had said it would hold auctions for the blocks and invited bids from companies based on their end-use in power, steel or cement.

The government committee in charge of handling the auction had changed the end use of about 20 coal blocks to the power sector, thereby restricting previous owners from bidding for the blocks.

(Reuters)