India’s ministry of coal has annulled the allocation of the Banai-Bhalumunda coal block to JSW Steel Limited over non-payment of bank performance guarantee of around INR 10,000 million ($118 million), government sources said on Monday, November 11.
As a result, JSW Steel Limited has also forfeited the INR 1 billion ($12 million) security deposit made by the company.
In its order, the coal ministry said that JSW Steel failed to comply with conditions after the issuance of the vesting order, including payment of performance security or performance bank guarantee and had been seeking an extension of the deadline to comply with the conditions.
Under the Coal Block Development and Production Agreement signed on March 29, 2023, JSW Steel had to submit the performance security and a completion notice by May 8, 2023. However, it has failed to provide the required guarantee and documents so far, the order noted.