Even as it recommended the deduction of bank guarantee amounting to three years of royalty for Monnet Ispat and Energy Ltd., the Inter-Ministerial Group (IMG) has told the company that if it is not able to start production at the Utkal B2 mine by March 2013, its licence will be cancelled.
However, the IMG cleared the Moher and Moher Amlohri blocks of the Anil Ambani-owned Reliance Energy Ltd. allocated for the 4,000-MW Sasan ultra mega power project (UMPP) in Madhya Pradesh, and the Pachmo block in Jharkhand allocated to Tata Steel for its Jamshedpur steel plant.
According to the minutes of an IMG meeting accessed by The Hindu , it said the company gave an assurance that the mine would be opened by 2013. However, the IMG recommended that in case the mine is not opened by March 2013, the block may be de-allocated and bank guarantee forfeited in full. Monet Ispat and Energy Ltd. had obtained environmental and forest clearance and 218 out of 295 acres of land was already in its possession. The company already made an investment of around Rs. 76 crore and was in advanced stage of setting up a washery plant under NEDO assistance from Japan.
“Though as per the terms and conditions of the allocation the necessary action for obtaining mining lease and to comply with various legal commercial requirement was not taken by the company within six months and it thus stands in breach of terms and conditions of allocation, it may, at this stage, be asked to submit a BG [bank guarantee] amounting to three years of royalty within one month from the date of letter in this regard, failing which the block may be de-allocated,” according to the minutes of the meeting.
