According to Ravi Uppal, JSPL in the whole industry is known do projects in shortest possible time. "We are considered to be an icon and if we cannot do that you can be assured nobody else can do better than us,” he adds.
We had huge difficulty to come up in Amarkonda mine. We tried to come in several times but that area is somewhat disturbed
The coal ministry recently cancelled allotment of a coal block in Madhya Pradesh to Jindal Steel & Power Ltd and Monnet Ispat & Energy Ltd as they failed to develop it. Speaking to CNBC-TV18 on the issue, Ravi Uppal, JSPL said the company is disappointed with coal ministry's show cause notice for delay in development of coal mines adding that the timeline given to them was not reasonable.
"The de-allocation by the government was a sad development given that the company had been working really hard on the development of those blocks," he said. According to Uppal, the financial loss incurred by the company due to the de-allocation of coal blocks is severe and cannot be quantified.
“JSPL in the whole industry is known do projects in shortest possible time. We are considered to be an icon and if we cannot do that you can be assured nobody else can do better than us,” he added.
Meanwhile, Uppal said that its Gare Pelma 4/6 coal block is in final stages and the company is waiting for approvals to start mining.
Below is the verbatim transcript of Ravi Uppal's interview on CNBC-TV18
Q: Please update us on the two coal blocks that are now freshly under scanner of the government, what is happening on that front at this point in time and will there be any impact on the expansion plans that the company has laid out for itself?
A: The two coal blocks that you are talking about Amarkonda and Urtan North, we have been working very assiduously on both these blocks and have been informed that these would be de-allocated. This is indeed a very sad development because we have put in huge amount of investment. Jindal Steel and Power Limited (JSPL) in the whole industry is known to be a company that does projects in shortest possible time. We are considered to be an icon and if we cannot do that you can be assured nobody else can do better than us.
Q: What is the exact investment that you have put into this and what could the financial loss be?
A: I don't think we can talk about financial loss, we do huge amount of preparatory work. In this country we have got a very long process to get the environment and forest clearances. Then we need clearance for land acquisition. It is a convoluted process and we have to keep going back to the state government to seek various kinds of approvals.
In case of Urtan North, we have done a lot of ground work, we were all set to go, we have appointed the contractor, equipment has been mobilised and at this juncture, when we are ready to start the operation, we are being notified about the mine being de-allocated. It is not a big mine but we have put years of effort to come to where we are.
When it comes to the Amarkonda mine, it is a mine where we had huge difficulty coming in. We tried to come in several times but that area is somewhat disturbed. So anyone who is taking that decision must be aware of the reasons as to what provided us to go at a speed faster than we could.
Q: Also, there has been news that you all have been served a notice for non use of coal blocks, even in that Gare Pelma 4/6 coal block. What will that mean because I thought the project for which you are going to use that coal is already up?
A: Gare Pelma 4/6 coal block, once again the final use is fully lined up and we cannot just go in and start mining the coal before all approvals are in place. We are very mindful of the steps that are involved before we can gain access and start mining the coal. Just in the neighborhood of that we are mining coal for past several years.
Q: Will you be able to work your way around it because this will hurt you even more?
A: Most certainly. I see absolutely no reason for anyone to think of Gare Pelma 4/6 coal block, we are all set up, we are ready to go and if the notice is there we would answer it in an appropriate way.
Jindal Steel stock price
On August 28, 2015, Jindal Steel & Power closed at Rs 67.55, down Rs 2.6, or 3.71 percent. The 52-week high of the share was Rs 252.90 and the 52-week low was Rs 60.75.
The latest book value of the company is Rs 136.75 per share. At current value, the price-to-book value of the company was 0.49.
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