Reduce bank guarantee for 4 blocks, deallocate 3 more mines: IMG

The Inter-Ministerial Group (IMG), which concluded scrutiny of 29 mines and will meet today to review further cases, has recommended deallocation of three more coal blocka and deduction of bank guarantee of four mines including one given jointly to the world's largest steel producer ArcelorMittal and GVK Powers.

It is likely to begin review of 29 more blocks, allotted to government companies from October 9. As far as the blocks recommended for deallocation are concerned, North Dhadu mine in Jharkhand was allotted to Electrosteel Castings & Others in January 2006. It has extractable reserves of 340 million tonnes (MT) and the coal from the mine was meant to be used in Sponge Iron project.

Reuters

Choritand Taliya mine in Jharkhand was allotted to Rungta Mines & Sunflag Iron & Steel in May 2008 for a pig iron project and has extractable reserves of 70.81 MT.

Gondkhari mine in Maharashtra, which too was deallocated today, was allotted to Maharashtra Seamless in November 2008.

Among the four mines recommended for deduction of bank guarantee, Seregarha block in Jharkhand was allotted jointly to steel giant ArcelorMittal and GVK Power in January 2008 for a power project and has an extractable reserve of 55.5 MT.

Dumri block in Jharkhand was jointly given to Neelachal Iron & Power Generation & Bajrang Ispat in January 2006 for a sponge iron project and has an extractable reserve of 40.85 MT.

Durgapur II/Sariya block in Chhattisgarh with reserves of 66.9 MT was allotted to DB Power in November 2007.

Moitra block in Jharkhand with estimated extractable reserves of 29.9 MT, which also has been recommended for deduction of bank guarantee, was alloted to Jayasawal Neco in May 2005.

The total number of mines that have been approved for deallocation by the government as per the recommendation of the IMG is seven while bank guarantee of seven others have been deducted.

With today's action, the IMG has so far recommended de-allocation of 11 blocks and deduction of bank guarantee in cases of 14 others. A total of 58 mines were given show cause notices for failure to develop blocks within stipulated timeline.

"The IMG after deliberations today recommended deallocation of three more blocks... North Dhadu allotted to Electrosteel Castings, Choritand Telaiya allotted to Rungta Mines and Gondkhari block allotted to Maharashtra Seamless," the statement said.

It also recommended bank guarantee deduction of Seregarha block given to ArcelorMittal and GVK Power, Moitra block allotted to Jayaswal Neco, Dumri block given to Neelachal Iron & Steel and Durgapur II/ Sariya block allotted to DB Power, it added.

Most of the blocks recommended for action today find mention in the latest CAG report which had recently estimated that the financial impact of the benefit to the private allottees due to allocation of coal blocks will be about Rs 1.86 lakh crore.

PTI