The government has threatened to cancel a coal block allocated jointly to Jindal Steel and Power (JSPL) and Gagan Sponge Iron for captive use, citing unsatisfactory progress in development of the mine.

In the showcause notice issued to both the companies on October 7 for delay in developing the Amarkonda-Murgadangal block in Jharkhand in the specified timeframe, the Coal Ministry said, "The progress (in development of the block) is not satisfactory."

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The coal ministry has sought replies from both the firms within 15 days of the issue of the letter, seeking reasons for the delay in developing the mines, failing which the process to de-allocate the block would start.

The Ministry has also issued notices to Gujarat Mineral Development Corporation and Pondicherry Industrial Promotion Development and Investment Corp asking them to explain why the development of the Naini coal block was delayed. The block was allocated to the two companies jointly in 2007.

The notices were issued on October 8 and replies have been sought from both the firms within 15 days from the date of issue.

Earlier, the Ministry had issued notices to ArcelorMittal Binani Cement and MMTC warning cancellation of blocks alloted to them for failing to develop the respective allotted mines.

When contacted, a senior JSPL official said, "The company is responding to the government's notice."

"We have obtained the prospecting licence (PL) for the block in August 2009. Drilling work has already started at the site. Land acquisition for the end-project is in the advanced stage. No objection certificate and water approval has been received from the state government," he said.

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