Corporate Feb 1, 2013
New Delhi: Coal Ministry has directed Nalco to furnish a bank guarantee of about Rs 18 crore for not developing its coal mine in Orissa and a failure to deposit the sum within 3 months may result in the block being taken back.
"Nalco is directed to furnish a Bank Guarantee (BG) of Rs 17.92 crore...to the Coal Controller's organisation within a period of three months from the date of issue of this letter failing which the block may be deallocated," the Coal Ministry said in a letter to CMD of Nalco.
Utkal-E block was allocated to National Aluminium Company (Nalco) in 2004 for its proposed captive power plant units in Angul, Orissa in which an "investment of Rs 1026.6 crore was reported". The decision for BG submission was taken following the recommendation of an Inter-Ministerial Group (IMG).
The Coal ministry further said in the letter that "taking into account all factors, including substantial progress and investment, the IMG did not consider it appropriate to recommend the deallocation of the coal block at this stage.
"However, in view of the slippage of the milestones, IMG recommends that the allocatee may be permitted to continue holding the block only on submission of BG equivalent to one year royalty for adherence to milestones," the letter said.
The IMG was set up under the chairmanship of Additional Secretary coal last year to review the progress of development of allocated mines and associated end use projects and to recommend action, including deallocation, if required. The IMG consists of members from ministries like Power, Steel, Law among others.
More From Firstbiz Staff.