Coal ministry may cancel one coal block allocation to Reliance Power's Sasan project.

The coal ministry plans to cancel the allocation of one coal block to Anil Ambani-led Reliance Power Ltd. and ensure that surplus production from two other blocks attached to the 4,000 MW Sasan ultra mega power project is not used for another project, government sources said. The ministry's plan follows the August 25 judgment of the Supreme Court (SC), which barred diversion of coal from blocks attached to any ultra mega power project. "Based on the directions from the Supreme Court, we plan to cancel the surplus coal diversion - four million tonnes per annum from Moher and Moher Amlohri and the entire Chhatrasal mine that is surplus for the Sasan plant," a government official said. Reliance Power did not offer immediate comment. An official said the ministry has not consulted the power ministry that administers the Sasan plant about the planned de-allocation of the Chhatrasal coal block, but might do so, if needed. The decision will affect Reliance Power's Rs 21,000-crore Chitrangi project in Madhya Pradesh, which was planned to be partly fired on nine million tonnes of coal from three Sasan blocks -Chhatrasal, Moher and Moher Amlohri Extension.