Ministry seeks reasons from firms for delay in developing coal mines

The Coal Ministry on Friday issued fresh show-cause notices to prior allottees of coal blocks, such as Jindal Steel and Power Ltd, JSW Steel and Tata Steel, among others, seeking reasons for delay in development of these acreages.

The notices were issued to companies who were prior allottees of the coal blocks which were de-allocated by the Supreme Court in September last year. The Ministry has also warned of bank guarantees being invoked if the companies did not provide satisfactory explanations or failed to respond.

The notices were also issued to companies such as Monnet Ispat and Energy Ltd, Bhushan Ltd, Nalco, Hindalco Industries, NTPC, Essar Power, SAIL, Adani Power and Tata Power.

“The subsequent annulment of coal blocks cannot exempt the prior allottees of cancelled coal blocks from invocation/deduction of bank guarantee,” the Coal Ministry said in a letter to allottees of around 130 blocks.

An inter-ministerial group (IMG) had already met on the matter on December 30, 2014, and deemed that cancellation of allocations cannot exempt these allottees from deduction in bank guarantees. “Subsequent development or consequence cannot override the condition precedent or bounden stipulations of allocations of coal blocks. As per the conditions of allocation letter, allocatees were bound to develop the coal blocks within the time period,” the Ministry said in its notice issued on Friday.

The Ministry also told the companies that failure to furnish explanations for delays in development of the block would lead to deductions. In its December 30 meeting, the IMG had observed that delays in development of the block could also be because of missed deadlines on the part of Central and State government authorities.

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