This story is a good explanation of what is happening with the...

This story is a good explanation of what is happening with the Bankura DRI coal block.
Whilst IRL haven't written it off just yet, they are sure to be progressing other opportunities.

Bankura DRI responds to show-cause notice
Debdeep Chakraborty Monday, November 30, 2009, 16:40 Hrs [IST]



SLOW DEVELOPMENT OF COAL BLOCK
Bankura DRI Mining Manufacturers Company Pvt. Ltd has responded to the coal ministry's show-cause notice pertaining to slow progress in development of the Biharinath coal block in West Bengal.

The Kolkata-based company was allocated the block, located in Ranigunj coalfield, in February 2007 for captive mining of coal.

Earlier this month, the company received a notice from the coal ministry seeking explanation for the inordinate delay in development of the block. The notice stated that Bankura DRI had not made any serious efforts in the last two-and-a-half years for developing the block as per the milestone chart that was appended to the allotment letter. It further said that the mining lease and forest and environmental clearance for the block were yet to be obtained. The notice informed that in the absence of a satisfactory explanation from the company, the ministry would initiate the process of de-allocating the said block.

"This notice may have been served on us by mistake," S. Bhattacharya, Managing Director, Bankura DRI Mining Manufacturers Company Pvt. Ltd, told Projectmonitor.

"We had applied for mining lease in March 2009. Forest clearance is not required in our case. As far as EMP is concerned, the public hearing is scheduled on the 4th of December. We have responded to the notice and have communicated the status to the ministry," he said.

Bhattacharya added that his company faced initial delays in developing the Biharinath coal block as it overlapped with a coal bed methane block.

"We were following up with coal ministry on the overlapping issue for a long time," he said.

Bankura DRI is a special purpose vehicle created by six sponge iron companies?Concast Bengal Industries, Amiya Steel, Govinda Impex, Bishan Dayal Goyal & Sons, Divya Jyoti Sponge Iron and Bhagwati Sponge. The six companies together run 11 sponge iron units in West Bengal. These units, with a total production capacity of 400,000 tpa, require 550,000 tonnes of coal annually.

"Developing an underground mine at the Biharinath block is highly challenging. The coal in this case is located at a depth and incline which is difficult to access. It requires cutting-edge technology. Things are, however, progressing well and we expect delivery of coal on time," Bhattacharya said.

As per the company's mine plan, the first delivery of coal (30,000 tonnes) will commence in the third year of operations. Annual production is expected to reach 480,000 tonnes in the seventh year of operations. The coal ministry's terms and conditions stipulate that Bankura DRI will have to commence production of coal from the Biharinath block by August 2011.

In July this year, Bankura DRI had signed a Heads of Agreement with Australia-based India Resources Ltd for developing the underground captive coal mine. IRL may be awarded a long-term exclusive contract for developing and operating the mine.

In the last three months, more than 40 companies have received show-cause notices from the coal ministry for unsatisfactory progress in development of their captive coal blocks.