Rediff.com  » Business » India's largest coal mine hit by a political war

India's largest coal mine hit by a political war

February 07, 2019 23:16 IST

There are allegations that the Congress-ruled Chhattisgarh govt is putting pressure on South Eastern Coalfields to not renew the contract with Sainik Mining whose promoter Rudra Sen Sindhu is the son-in-law of the late Sahib Singh Varma, a BJP leader and former chief minister of Delhi.

Korba coalfields - one of the country’s largest clusters of coal mines - is in the middle of a tug-of-war over surplus production.

The three mines, Gevra, Kusmunda and Dipka, which form the cluster, are run by South Eastern Coalfields Limited (SECL).

The mining operations are sub-contracted to Sainik Mining and Allied Services Limited which wants to be paid extra for every surplus tonne produced.

 

Sources said the mining contract with Sainik Mining has concluded and SECL is not willing to renew it.

This has led to a logjam with Sainik refusing to let go the contract and is also reducing production from the mines.

In December 2018, SECL’s production fell 13 per cent year-on-year though the coalfields produced 110 million tonnes of coal, 8.9 per cent higher than last year, cumulatively, for the April-December 2018 period.

In its mission 2019-20, SECL said it would increase annual production to 250 million tonnes as its contribution to the 1 billion tonne target of Coal India.

For facilitating this, SECL has been pushing its contractors to produce more coal.

Sainik Mining, it is learnt, has asked for extra money for producing more coal.

“The contractor has demanded that it be paid on a per tonne basis for every extra tonne of coal produced. The contract of Sainik Mining with SECL has expired and the latter has not renewed it,” said an official.

Sources said there was a likelihood of SECL re-issuing the contract. However, the contract was in the middle of a political crossfire, too.

Sainik is owned by the extended family of Captain Abhimanyu Singh Sindhu, finance minister at the BJP-ruled Haryana government.

There are allegations that the Congress-ruled Chhattisgarh government is putting pressure on SECL to not renew the contract with Sainik Mining.

“Some state government functionaries have cited that the company and its owners do not have a good financial history.

"With this new demand for extra payment, the contract could land Sainik in trouble,” said an executive.

SECL did not respond to queries emailed to its chairman and managing director. Sainik Mining could not be reached also.

The two promoters of Sainik Mining are Rudra Sen Sindhu and Captain Kuldeep Solanki.

Rudra is the son-in-law of the late Sahib Singh Varma, a BJP leader and former chief minister of Delhi. Rudra is also the brother of Abhimanyu.

There are allegations of stamp duty evasion on Sainik Mining for non-payment of close to Rs 85 lakh for a mine allocation.

An RTI activist had, in the past, alleged that Sindhu used his political connections to get mining contract and “undue benefits” for his family-run Sainik Mining.

The matter is pending before the chief minister of Haryana, as last reported.

With the rising power demand, the government has asked Coal India to increase production.

Coal supply faltered during 2017-18 due to a sudden spurt in demand and non-preparedness at the mining and transport segments.

In November last year, the ministry of coal directed Coal India to take immediate measures to ensure 2 million tonnes plus daily production.

Photograph: Ahmad Masood/Reuters

Shreya Jai in New Delhi
Source:
SHARE THIS STORY