New Delhi (Platts)--22Nov2012/1054 pm EST/354 GMT

India's coal ministry Thursday issued letters canceling two coal blocks allocated to three private firms, continuing its drive against companies not utilizing coal blocks allocated to them.

The letters were issued on the recommendation of an inter-ministerial panel, which was looking into the progress made by companies for developing the coal blocks allocated to them.

The ministry sent a cancellation letter for the Choritand-Taliya coal block in Jharkhnad, owned by a joint venture between Rungta Mines and Sunflag Iron and Steel. The second coal block being cancelled is Macherkuda in Jharkhand, which was allotted to Bihar Sponge Iron.

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The inter-ministerial panel recommended the cancellations because of the failure on the part of the companies to develop them within a stipulated time frame.

This month, the panel has so far recommended the cancellation of eight coal blocks held by various private companies and 11 blocks held by state-owned companies, on the same grounds.

The panel was created in July to review the efforts of 58 companies, both private and state-owned, that are deemed to have made inadequate progress in developing coal blocks.

In September, the government cancelled 13 blocks allocated to private firms, as advised by the panel. Of the 195 blocks allocated since 1993, only 30 have started producing coal.

--Sapna Dogra, newsdesk@platts.com --Edited by Jonathan Fox, jonathan_fox@platts.com

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