Investment Will be in Jeopardy if Coal Blocks deallocated: Naven Jindal

Jindal Steel and Power Chairman Naveen Jindal today said that about Rs 4 lakh crore investment made to develop coal mines would be in jeopardy if the blocks be deallocated.

"The total investment that has gone to develop these blocks is around 4 lakh crore rupees out of which 2.5 lakh crore is the bank loan," Mr Jindal said at a summit on Mining and Metal here.

Mr Jindal was reacting to a question on Supreme Court's recent observation terming all coal mines allocated between 1993 and 2010 as "illegal".

Supporting previous governments' mine allocation policy, he said India is the only country in the world which seeks not only royalty, but also an assurance for using the produce in their end-use projects. In other countries, the government, being the owner of the mines, charge only royalty.

"If we term the government's coal allocation policy as faulty and illegal, then the effort put in by the investors to revive the discarded mines of Coal India, the entire Rs 4 lakh crore investment would be in jeopardy," he said.

The Supreme Court had on August 25 held that allocation of 218 blocks in pre-auction era were done in an illegal manner by an "ad-hoc and casual" approach "without application of mind" and "common good and public interest have, thus, suffered heavily" due to lack of fair and transparent procedure resulting in "unfair distribution" of the "national wealth".

Highlighting the challenges faced by companies seeking to invest in setting up steel plants, he said though India used to produce more than China at one point, China's production has now gone up by 10 times that of India's