Mining firms in Odisha scurry to pay SC-ordered penalty

Tata Steel, Rungta Mines take lead in payments

Mining entities in Odisha are in a rush to fork out penalties ordered by the Supreme Court (SC) for overproduction during 2000-11, as the December 31 deadline looms.

The companies need to pay a total of about Rs 17,576 crore in compensation for extracting iron and manganese ore beyond the limits approved earlier under environment clearance (EC) rules. After the SC recently ruled out any extension in payment deadline, the companies are making intense effort to save their operational leases. The top court also ruled out payment in instalments.

"All big captive and merchant mining companies would pay the compensation amount to save their leases. Tata Steel, Rungta Mines and Essel Mining & Industries have already done so. All operational mines are expected to meet the deadline. For mines out of operations, it would be tough for the leaseholders to make timely payment," said a mining industry source.

The SC judgment was dated August 2 this year. It had directed the state government to extract the cost of excess production from the defaulting miners. The apex court called for recovery of the entire compensation amount, compared to only 30 per cent recommended by the Central Empowered Committee (CEC), a panel appointed by the judges to probe allegations of large-scale illegal mining in the state. The court was adjudicating on a petition in this regard by Common Cause, a non-government entity.

 

Complying with the SC order, the Odisha government issued demand notices for EC violations on 150-odd iron and manganese ore lessees.

Government officials confirmed that miners had started depositing the money. "The companies have (so far) paid Rs 2,000 crore. We expect the figure to (now) move up sharply," said one. The funds would accrue to Odisha Mineral Bearing Areas Development Corporation (OMBADC), tasked with periphery development of mined areas.

State-owned Odisha Mining Corporation is saddled with the biggest penalty amount of Rs 2,178 crore. OMC's managing director R Vineel Krishna said they'd pay latest by Friday. Others with steep penalty burdens include Sharda Mines (Rs 1,983.9 crore), Essel Mining (Rs 1,102 crore), Mesco Steel (Rs 924.7 crore), Orissa Minerals Development Corporation (Rs 642 crore) and Tata Steel (Rs 614 crore).

The Rs 17,576 crore in compensation was calculated by the CEC for excess mining. Its report said illegally extraction was of 215.5 million tonnes of iron and manganese ore between 2000-01 and 2010-11.