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Monnet Ispat & Energy Ltd (MIEL), which won a coal block in Odisha for about Rs 9,537 crore in the recent mines auction, is set to surrender it saying that the proposed changes in electricity tariff rules will render the project unviable.
"We have submitted in the Court that we are ready to relinquish the block as the company was not told of the government's plan to cap the fixed component of power tariffs at the time of bids," Group's Marketing & Corporate Affairs President Amitabh S Mudgal told PTI.
MIEL won Utkal C mine for power sector in March at an estimated Rs 9,537.22 crore, at bid price of Rs 770 per tonne.
It has contested in the Delhi High Court the government's plans to cap the fixed component of power tariffs. The Centre recently auctioned 29 blocks in two phases to companies like Monnet, GMR Chhattisgarh, Hindalco, Reliance Cement among others.
An estimated revenue of Rs 3.35 lakh crore would accrue to coal-bearing states from 29 auctioned and 38 alloted mines, as per the government. The auction followed the Supreme Court's cancellation of 204 coal blocks last year.
Utkal C has an extractable reserve of 123.86 million tonnes (MT) and is housed in Talcher coalfield of Angul district of Odisha. JSW Energy earlier this month had entered into a non- binding pact with MIEL for possible acquisition of its power arm.
"We have entered into a non-binding agreement with Monnet Ispat for due diligence for acquiring their power arm MPCL. Due diligence will take at least 40 to 45 days and based on the outcome the decision will be taken," Joint MD & CEO, JSW Energy, Sanjay Sagar had said.
MIEL had earlier informed the BSE that it has signed non-binding MoU with JSW Energy for discussions to sell majority and controlling stake of its subsidiary, Monnet Power Company, which is developing 1,050 MW coal fired thermal power plant located in Odisha.
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