row over bengal coal block

This from the Indian Telegraph. What does this means for IRL??

Oct 28, 2010 ? Calcutta: Six Bengal-based sponge iron manufacturers are in a fix as the coal block allotted to them is located in the leasehold area of Great Eastern Energy Corporation Ltd (GEECL) that produces coal bed methane from the region.

In 2007, the coal ministry allotted the Biharinath block in Bankura, Bengal, for captive use by the six companies that had formed a consortium for the block. However, their plans to start mining on the 10.5-sq-km block have hit a roadblock after the environment ministry and subsequently the directorate general of mines safety (DGMS) refused to give them the go-ahead following objections from GEECL.

The block has coal reserves of 95 million tonnes of which 31 million tonnes can be extracted. The consortium ? Bankura DRI Mining Manufacturers Co Pvt Ltd ? has entered into an agreement with Australia?s India Resources Ltd for exploration and mining. Bankura DRI expected to mine 700,000 tonnes of coal per annum to be distributed equally among the six companies.

?Our entire project is now stalled. The environment ministry said it could not process our application till the matter was sorted out among the coal and oil ministries and the two companies. We proposed a joint development model but the DGMS has now said it is not safe,? Subhendu Bhattacharjee, managing director of Bankura DRI, said.

The development comes at a time Bengal is trying to push industrial growth without hurting the prospects of the coal sector.

The Left Front government coaxed many industries, especially steel, to set up a base in Burdwan and Bankura districts. But the projects of companies such as Bhushan Steel, Videocon, Abhijeet Group, Vedanta Aluminium and Bengal Aerotropolis ran into problems over mining land and had to be shifted or realigned following protests from Coal India Ltd over the choice of land.

Prashant Modi, president and chief operating officer of GEECL, said Bankura DRI?s move was ?absolutely illegal? and his company would do ?whatever it takes? to prevent mining.

In 2001, the oil ministry awarded the block to GEECL, India?s first company to commercially produce coal bed methane (CBM). Owned by the Modi family and listed on the London Stock Exchange, the company has invested Rs 800 crore in the block spread over 210 sq km. However, they are yet to start work at Biharinath.

GEECL started commercial production of CBM three years ago.

Great Eastern scoffed at the idea of a joint development proposed by Bankura DRI and supported by the coal ministry. ?According to the terms of the production sharing contract we signed with the Centre, coal mining can not be done,? Modi said.

It is learnt that the Bengal government is in favour of CBM over mining on the grounds of getting the mineral extracted later after the gas has been pumped out.

?It is not the companies but the lack of inter-ministerial co-ordination (coal and oil & gas) that is to be blamed for this impasse,? said an industry veteran.