"The IMG has recommended cancellation of two blocks given to Bhushan Steel and SKS Ispat & Power, and suggested the forfeiture of bank guarantees for two other mines. It scrutinised four cases in all today," a source, who attended the five-hour long meeting of the IMG.

If the recommendations of the Inter-Ministerial Group (IMG) are accepted by the Coal Ministry, the number of blocks cancelled for insufficient progress would go up to seven.

Bhushan Steel was allotted New Patrapara block in Odisha in January, 2006. The block has an extractable reserve of 316.09 million tonnes. It was meant to be used for making sponge iron, which finds application in steel manufacturing.

The blocks also finds mention in the CAG report which had estimated that the company got undue benefit to the tune of Rs 9,338 crore.

The source said a block belonging to SKS Ispat and Power, in which Tourism Minister Subodh Kant Sahai's brother held the position of "honorary director", has also been recommended for de-allocation. However, sources did not disclose the name of the block.

The panel has so far scrutinised the replies furnished by 18 coal block allottees, including four today, in its three meeting in the last four days. It would meet again on Monday.

The IMG is scrutinising 29 blocks awarded to private firms out of the total 58 which were given show-cause notices for delays in developing mines.

Last evening, the panel had recommended cancellation of Gouganrdih ABC mine, given jointly to JSW Steel and Himachal EMTA, in 2009, according to sources.