BS reported that in 2003, Gondwana Ispat was allotted the Majra block in Maharashtra for meeting the coal requirement of 480,000 tonnes per annum for its proposed sponge iron plant. Seven years after the allocation, the union coal ministry has issued a showcause notice to the company as important milestones including forest clearance mining lease and land acquisition are still pending.

Through the notice, the ministry has given the company time till October 28th to explain why the delay in the development of coal block should not be held as a violation of the terms and conditions of the allotment failing which it would be presumed that the company has no explanation to offer and appropriate action would be taken against it for de-allocation of the Majra coal block.

The company had assured production from the block to start by the second quarter of 2008. It later shifted the time of production to December 2009.

In a review meeting earlier this year, the ministry noted that there has been no serious effort by the company to develop the block. The showcause notice states that “It is seen that the company has repeatedly failed to keep its promises made on earlier occasions to this ministry and thus non-serious about the timely development of the block.”

Even on the progress achieved so far by the company to develop the block, like submission of mining plan and application of forest clearance, there have been slippages of periods from a few months to over two years.

Hyderabad based GVK Power and Bhushan Steel and Power have been served similar show cause notices by the government threatening cancellation of their allocations.

(Sourced from Business Standard)