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Non-payment of fines to shut off 20 mn tonne iron ore capacity in Odisha

The deadline for paying compensation for overproduction of iron and manganese ore according to SC judgment was December 31

Jayajit Dash  |  Bhubaneswar 

iron ore

Seven working have shut down in as nine owners failed to pay the penalties ordered by the The closure of operational leases is set to knock of 20 million tonnes (mt) of annual iron ore capacity in the state.

is the biggest of iron ore in the country. The state produced in excess of 100 mt in last fiscal and has approved environment clearance (EC) to churn out 180 mt in 2017-18.

The deadline for paying compensation for overproduction of iron and manganese ore according to the August 2 judgment was December 31. Serajuddin & Company, and state-run of Ltd (IDCOL) are among the key working mines that failed to meet the apex court-mandated deadline for penalty payments. The three operated their leases in Keonjhar's Joda circle.

While Serajuddin was burdened with Rs 748 crore penalty, was slapped with a demand notice to pay Rs 9,247.5 million as compensation. Among the non-operational mines, Sarda Mines was saddled with the biggest penalty of Rs 1,938 million.

"The closure of working mines will cut iron ore capacity in by 20 million tonnes each year. The production cut will be reflected in the last quarter of this fiscal. With the shutdown of these mines, has now only 40 iron and manganese leases in operations", said a mining industry source.

After the verdict dated August 2 this year, the government had slapped demand notices on 131 mines to pay compensation amounting to Rs 175.76 billion for EC violations. The compensation was calculated by the central empowered committee (CEC), a Supreme Court-appointed panel that probed into large-scale mining irregularities in The miners were bound to pay the compensation for overproduction of iron ore and manganese ore latest by December 31 to save their leases.

Prafulla Mallick, Odisha's steel & mines minister said, "The state government has shut down seven working mines as they did not pay the penalties. We have recovered Rs 8,223 million from the lessees."

Most of the key miners with huge penalty burdens have paid their share of compensation. Tata Steel, Essel Mining, Rungta, state-run Mining Corporation (OMC), (JSPL), Indrani Patnaik, Kaypee Enterprises, and and K N Ram have made payments. All these were slapped with demand notices where the payable amount exceeded Rs 1 billion.

OMC faced the biggest penalty burden at Rs 2,177.97 million. There were other leaseholders saddled with significant penalties- Sarda Mines (Rs 1,983.86 million), Essel Mining (Rs 1,102 million), (Rs 9.24 billion), (Rs 6.42 billion) and (Rs 6.14 billion).

In its report, CEC said miners in extracted 215.5 million tonnes of iron and manganese ore beyond approved limits between 2000-01 and 2010-11.

First Published: Mon, January 01 2018. 18:47 IST