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Sunday, December 6, 2009

Steel projects in WB facing coal block hurdle

It is reported that some big ticket investments in the steel sector in West Bengal could take a hit if the central government introduces open auction of captive coal blocks,

Mr Nirupam Sen commerce and industries minister of West Bengal expressed his fear in view of the proposed open auction of the coal mines.

Talking to media at the Steel Conclave 2009, organised by the CII in the city on Saturday, the minister held that the new system might also do away with the state's dispensing coal mines. '

Mr Sen pointed out that the proposed auction system would adversely affect at least three mega steel projects Videocon, Bhushan Steel, and Kalyani Steel due to uncertainty over coal linkages.

He told “Progress of these projects would suffer if the state government is unable to provide coal linkages. The banks too would not give loan if the project does not have confirmed coal linkage.”

He said that “Since 2006, we have received allotment of six coal blocks, but we need nine more blocks for steel and other projects.”

Mr Sen elaborated that JSW has got three blocks out of six allotted to the state. It may be noted that JSW is planning to set up 10 million tonne steel and 1,600 MW power project in two phases with an investment of INR 35,000 crore. Jai Balaji too has got coal blocks for its project. It has proposed 5 million tonne steel and 3 million tonne cement plant at Raghunathpur in Purulia with an investment of INR 16,000 crore.

According to the industries minister, the state government had written a letter to the Centre against the open auction system. He told that “We got the reply yesterday but there is no clear indication about the future of the state's quota over coal blocks. The reply is not very positive.”

The combined investment proposed in these three projects is over INR 25,000 crore. Of the three mega firms, Videocon has proposed 3 million tonne steel plant and a 1,600 MW power project. Kalyani has proposed 2 million tonne while Bhushan was planning to set up a 3 million tonne plant.

(Sourced from http://www.steelguru.com/news/index/2009/12/07/MTIzNjEz/Steel_projects_in_WB_facing_coal_block_hurdle.html)

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