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Coal ministry asks JSPL to submit BG for Utkal B1 block

Guarantee value is equivalent to a year's royalty in the office of the Coal Controller, Kolkata

The Ministry of Coal has asked Jindal Steel & Power Ltd (JSPL) to submit a bank guarantee (BG) of Rs 68.53 crore for its Utkal B-1 coal block allocated in Odisha.

The ministry has instructed the company to deposit the BG, equivalent to one year's royalty in the office of the Coal Controller, Kolkata.

Imposition of BG is as per the recommendation of the inter-ministerial group (IMG) mandated to oversee status of allocated coal blocks and suggest action, including de-allocation if required.

Utkalm B1 block has obtained both environment and forest clearances and 95 per cent of land acquisition is completed for the coal mine.

As per information furnished by JSPL, total investment made in the coal block and end-use plant is Rs 17,020.62 crore.

In its submission to IMG, the company stated that there has been delay in signing of the mining lease (ML). While the state government has issued the grant order in May 2011, execution order is still pending for more than two years.

The Coal ministry has conveyed previous approval for grant of ML to the state government in August 2007. Out of the total land of 270 hectares (ha) needed for developing the coal mine, acquisition of 242.71 ha is completed and balance 27.29 ha non-forest land is pending.

The IMG observed as per the report of the Coal Controller's office, the allocatee has obtained environment and forest clearances and also obtained mining approval but there has been delay in achieving these key milestones.

Utkal B1 coal block was allocated to JSPL on September 29, 2003 on the condition that coal mined from the block will be used exclusively to meet its requirement in the proposed captive power plants and the sponge iron plants.

Source: Business Standard