Coal Mine Cancellation Will Hurt Economy, Investment Climate: JSPL

Jindal Steel & Power has been in the spotlight since the Supreme Court's ruling on coal block allocations earlier this week. The top court has ruled that all allocations done after 1993 are illegal. The final decision on the fate of these blocks is likely to be taken on September 1.

Ravi Uppal, managing director and group CEO of JSPL told NDTV that he is absolutely certain that the court will not take any decision that will have any adverse impact on the national economy and the national investment climate. (Watch interview here)

Here is an edited transcript of the interview:

How much coal do you extract from the captive coal mines?

We have three mines which are operational already, two of them are basically for our power project and one mine is dedicated to steel project in Raigarh. All put together we are doing about 12 million tonnes of mining from these coal mines.

How much coal do you buy externally?

We do buy coal from e-auctions plus we also get part of our coal supply from our mines in Mozambique and Australia because the extent of coal that we have at this moment is not adequate. We are hoping for some linkages, mainly for the Tamnar phase 2, we have got the linkage for unit no-1&2.

What should the government do if allocations are cancelled?

There are quite a few things that the government can do. If you recall about the Supreme Court's judgement on August 25, they did not take the decision on what to do about the coal blocks that has been allocated. They said that they will read out a statement in this regard on September 1. But they called upon a bench of legal experts, government representatives to come and suggest to them on what should be done. I think the government will do well to appraise the highest judiciary about the colossal implication it will have if they go for extreme step of cancellation.

I would like to mention that we have nearly 20,000 MW power capacity that are sourcing coal out of these coal blocks. We have millions of tonnes of steel plant that are getting coal from these coal blocks. And same is the case with cement plants. Thousands of people are employed. Thousands of crore of tax is being paid by these units. Our economy is passing through a difficult phase. Any extreme decision will have very serious implications on our economy. It will also cause serious erosion of confidence of investors. Therefore the government should ask them (Supreme Court) to act in a pragmatic way.

The government has to make sure that the units which are already running, their coal supply is resumed on a top priority basis so that those investments are not jeopardised. For example we have made an investment of Rs 20,000 crore in setting up these integrated plants of 6 million tonnes and the plant is absolutely complete and investment is over, it is ready to go, we are just waiting for our own Utkal mine to be allocated to us so that we can get the plant fully functional. So I would really request the government to ensure that without any further delay the Utlak mine is allocated to us.

Are you looking at coal mines abroad?

We already have coal mines in Indonesia, Mozambique and Australia. We also have a mine in Botswana. Many of these mines we have taken with a view to source coking coal, because in our country the coking coal availability is extremely limited. In the process of generating coking coal we also produce thermal coal, so we would definitely try to source some amounts of thermal coal from these mines but that cannot be the mainstay. The mainstay has to be our own mines in India. The imported coal cannot be a substitute for the coal from our own mine.

Has mining stopped since the judgment?

No, nothing has stopped at the moment. We are waiting for the judgement to be done on September 1 and right now the things continue as they were. We are already importing some extent of coking and thermal coal, but that is a small fraction of our total coal requirements. We continue to depend on our domestic mines.