JSPL and Monnet lost their Urtan Coal block as Ministry of Coal cancelled their allocation on Tuesday. Ministry of Coal has de-allocated the Coal blocks over companies’ irregularities on mine development.

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

“De-allocation of the Urtan North Coal blocks, in the state of Madhya Pradesh, which are allocated to JSPL and Monnet Ispat & Energy, was decided.” the Coal Ministry said in a letter dated 17 December to both the firms. “Companies have failed to develop the same (Coal block) as per the prescribed milestones, without any valid reasons, for the delay. It said, the companies will not be eligible for allocation of any Coal block in lieu of the de-allocated blocks.

Monnet’s Reaction

“It is ironic that development time given for a mine is far, far away from the ground reality”, said Monnet Group Sr Vice President, Amitabh S Mudgal to media on development.

He added, “We will go to the court and in the process, prime focus of developing the block will get diverted, resulting in further delays in augmenting Coal production.”

JSPL’s Reaction

JSPL spokesperson said to media, “Both the companies have made all possible efforts to start Coal mining in Urtan Coal block. The Coal block has been de-allocated despite of the best efforts made by our companies.”

The Ministry has further added, “Order regarding deduction and encashment of proportionate BG (Bank Guarantee), linked to the set milestones for development of the block as per the letter of allocation, would be issued separately after deductible amount intimated from the concerned department.”

The decision was taken after the inter-ministerial group’s (IMG) recommendation on de-allocation of blocks.” taking into account the facts like Environment Clearance, land acquisition, grant of previous approval of mining leases are pending, IMG recommends de-allocation 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 recommended actions, including de-allocation for delays in development of mines.

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