Cracking the whip on private companies for failing to develop coal blocks allocated to them within a time frame, the Coal Ministry on Thursday said it accepted the recommendations of the Inter-Ministerial Group (IMG) and notified de-allocation of four blocks and deduction of bank guarantee in the case of three companies.

Out of the four blocks cancelled, two were allocated during the NDA regime of 2003. One of the blocks in Odisha where the IMG has recommended deduction of bank guarantee was allocated during the NDA rule in 1999.

The IMG made the recommendations after a meeting on Wednesday night. This was preceded by a three-day evaluation exercise from September 6, where it deliberated upon allocation of eight blocks to five parties.

The IMG took into consideration various factors before making the recommendations, including approval of the mining plan, grant of environment clearance and the status of forest clearance, land acquisition and setting up of end-use project by the concerned private company concerned.

The Ministry said the IMG had recommended de-allocation of four blocks — the Bramhadih Block in Jharkhand allocated to Castron Mining Ltd. in 1996; the Chinora and Warora (Southern part) blocks in Maharashtra given to Field Mining and Ispat Ltd. in 2003; the Lalgarh (North) block in West Bokaro, Jharkhand, allotted to Domco Smokeless Fuels Pvt. Ltd. in 2005.

It also recommended that in the case of Utkal B2 Block in Odisha allocated to Monnet Ispat & Energy Ltd. in 1999, where there was substantial progress but no provision for bank guarantee, the company may be asked to submit a bank guarantee amounting to three years’ royalty within a period of one month from the date of letter in this regard, failing which the block may be de-allocated.

In addition, the IMG, headed by Additional Secretary Zohra Chatterjee, had also recommended deduction of bank guarantee in the case of Marki Mangli-II, III and IV blocks in Maharashtra allocated to Shri Virangana Steels Ltd.

In the case of Shri Virangana Steel — now Topworth Urja and Metals Ltd. — the bank guarantee stands at Rs.2 crore, while that for Monnet Ispat would come to around Rs.90 crore.

IMG to meet today

The IMG will meet again on Friday and take up 10 cases and make its recommendations to the Coal Ministry.

The eight blocks de-allocated on Friday are part of the 58 blocks that were issued show cause notice by the IMG and asked to appear before it. The IMG has taken up 29 of the private companies so far. “The IMG would continue examination of the remaining cases in its next meeting scheduled to be held on September 14 and will hold further meetings as may be required for completing recommendations.”

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