By BS Reporter
Now a Gujarat based company comes under the axe of the Inter-Ministerial Group (IMG) which on Thursday recommended de-allocation of two coal blocks, including the Bhaskarpara block that was allotted to Electrotherm (India) Ltd (EIL) and Grasim Industries. EIL's shares fell 2.04 per cent on the Bombay Stock Exchange (BSE) during the day closing at Rs 48.
The IMG in its meeting on Thursday recommended de-allocation of two coal blocks, Dahegaon Makardhokra in Maharashtra and Bhaskarpara in Chhattisgarh. While Dahegaon Makardhokra block was allotted to IST Steel & Power, Gujarat Ambuja Cements and Lafarge, the Bhaskarpara block is with Electrotherm and Ultratech Cements, a division of Grasim Industries.
The Bhaskarapara block with a deposit of around 45 million tonnes of coal was allotted to Electrotherm (India) Ltd and Grasim Industries Ltd in 2008. Ahmedabad-based Electrotherm India Ltd., had signed a joint venture agreement with Aditya Birla Group's Grasim Industries Ltd for a coal extraction. According to the terms of the agreement, Electrotherm was holding 52 per cent share while the remaining was held by Grasim.
The JV partners had planned to invest Rs 300 crore for coal extraction from the mine, EIL had said earlier. The company, however, could not be reached for a comment on the issue at the moment.
While Grasim had planned to use the coal for its cement division, Electrotherm was using it for steel production as well as power generation.
The Rs 1645.49 crore company has a 360,000 tonnes per annum (TPA) steel plant at Kutch district of Gujarat which produces structural steel, alloy steel and stainless steel.
The Gujarat High Court, however, had ordered a shut down of the company's steel plant in May this year as it lacked proper environment clearance mandatory under Environment Impact Assessment Notification,2006.
The Court cancelled the environment clearance granted in January 2010 and asked the company to shut down production in the plant with immediate effect.
Till now, 13 coal blocks out of 29 discussed by the IMG have been de-allocated.