Jindal Steel asked to put up Rs 68-cr bank guarantee

IMG noted that grant of mining lease and mine opening permissions pending

Continuing with its tirade against captive coal miners defaulting on the development of coal reserves, the coal ministry on Monday imposed a bank guarantee of Rs 68.5 crore against Jindal Steel and Power Ltd (JSPL), promoted by industrialist and parliamentarian Naveen Jindal.

“It is decided to direct that the bank guarantee, equal to one year’s royalty as calculated by the Coal Controller’s Office, be furnished by the company,” the ministry said in a letter to JSPL issued on Monday.

The company was asked to pay the money for a delay of six years in the development of Utkal B1 coal block in Odisha, allocated in September 2003.

The move came on the basis of are commendation of an inter-ministerial group (IMG) on coal blocks review.The IMG had noted that the grant of mining lease and mine opening permissions are pending, the mine is not operational even as the scheduled date of operation was March 2007 but 95 per cent of the land has been acquired.

"It is decided to direct that the bank guarantee, equal to one year's royalty as calculated by the Coal Controller's Office, be furnished by the company," the ministry said in a letter to JSPL issued today. The development follows the ministry last month accepting the recommendation of IMG for cancellation of Gare Palma IV/6held by JSPL. However, the ministry withheld "further action" in that case asthe matter is in court.

The ministry had last month cancelled allocations of 24-odd blocks which are part of the 61 suchacreages being reviewed as part of a hearing in the Supreme Court in connection with the Rs 1.86 lakh-crore coal scam. The Supreme Court had asked the centreto explain the delays in the development of blocks. The ministry had on January 15 served a three-weekultimatum to the companies sitting on the 61 blocks where mining leases havenot been executed to furnish the proof of the requisite clearances obtained bythem to open their captive mines.