CoalMin asks Mahaguj for bank guarantee

The coal ministry has issued an ultimatum to Mahaguj Collieries to furnish a bank guarantee of Rs 268.80 crore by June 1 or face de-allocation of its Mahanadi and Machakata coal blocks in Odisha.

Mahaguj is a joint venture of Maharashtra State Power Generation Company and Gujarat State Electricity Corporation Ltd.

"The Inter-Ministerial Group (IMG) noted that the allocatee has now completed exploration and is in a position to take steps for development," the ministry said in a communication dated March 1 to Mahaguj. "As per the terms and conditions of allocation, any slippage pertaining to the period of 27 months allowed for exploration would render the allocation liable for cancellation and withdrawal of block from any allocate. However, the IMG did not consider it appropriate to recommend de-allocation of the block at this juncture and recommended that the allocatee may be permitted to continue holding the block only on submission of bank guarantee equivalent to a one year royalty for adherence to milestones."

A Mahaguj official said: "We will examine the coal ministry's communication and decide a course of action. We have requested the prime minister to urgently convene a meeting of the chief ministers of Maharashtra, Gujarat and Odisha so that Mahaguj is able to proceed further (in the face of land acquisition and green clearance delays)."