The Coal Ministry today said it has cancelled the allotment of a coal block in Madhya Pradesh to Jindal Steel and Power Ltd (JSPL) and Monnet Ispat & Energy Ltd as they failed to develop it.

“The companies have failed to develop the same (coal block) according to the milestones prescribed without any valid reasons for the delay, it has been decided to de-allocate the Urtan North Coal Block in Madhya Pradesh allocated to Jindal Steel & Power Ltd and Monnet Ispat & Energy Ltd,” the Coal Ministry said in a letter dated December 17 to both the companies.

The Ministry further said the companies would not be eligible for allocation of any coal block in lieu of the deallocated block.

The companies did not respond to queries sent to them on the development.

The Ministry said: “Order regarding deduction and encashment of proportionate BG (Bank Guarantee) linked to the milestones set for development of the block in line with the allocation letter would be issued separately after receipt of calculation of amount from the office of the coal controller.”

The decision was taken after the inter-ministerial group’s (IMG) recommendation for de-allocation of the block.

“Taking into account the facts...EC (Environment Clearance), land acquisition, grant of previous approval of mining lease are pending, IMG recommends deallocation of coal blocks,” the ministry said.

The coal block was allocated to both the firms in 2009 to meet the requirement of their sponge iron plants.

The Government had formed the IMG last year to review the progress of coal blocks allocated to firms for captive use and recommend action, including de-allocation for delays in development of mines.

The panel under the chairmanship of the Additional Secretary in the Coal Ministry comprises members from other ministries, including steel and power.

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