Coal news and updates

Court order puts JSPL, Gagan Sponge BG deduction on hold

March 17: The Ministry of Coal (MoC) has informed Jindal Steel & Power and Gagan Sponge Iron Private Limited that the Rs 33.50 crore bank guarantee (BG) furnished by these companies, and which was to be deducted and deposited with the government, has been put on hold in view of the interim order of the High Court of Jharkhand.

The BG pertained to the de-allocation of Amarkonda-Murgadangal coal block in the state of Jharkhand allotted to JSPL and Gagan Sponge and deduction and encashment of the BG, which had been announced by the MoC earlier on December 23, 2013.

Meanwhile, the MoC has decided to impose a BG on GVK Power in respect of the Tokisud North coal block in Jharkhand, allocated in January 2002.

The Inter-Ministerial Group (IMG), set up to review the progress of coal blocks and recommend de-allocation if need be, considered the terms and conditions of allocation, the show cause notice issued to GVK Power, its reply to the show-cause, the status report of the Coal Controller's Organisation (CCO) along with the status paper submitted to it.

It noted that though the geological reserves had been purchased, mining plan approved, environment and forest clearances obtained, mining lease executed and mine opening permission granted, a part of the land acquisition is still pending.

Moreover, mine operation for OB removal has been suspended because of local disturbances.

Hence, a BG of Rs 27.16 crore, equal to one year's royalty must be deposited in the CCO's office in Kolkata to expedite production from the said block.