Odisha sends show cause notice to Coal India's MCL to recover Rs 20,000 cr

The notice has been served on 27 coal mines in MCL's command area

The Odisha government has sent a show cause notice to Coal India Ltd (CIL) subsidiary Mahanadi Coalfields Ltd (MCL) for excess coal production between 2000-01 and 2010-11.

The notice is viewed as a precursor to the state government recovering the cost of excess production calculated at about Rs 20,000 crore. The notice is served on 27 coal mines in MCL's command area.

"We have dispatched a notice show cause to MCL. The state government would invite MCL authorities for a hearing by the end of this month. Later, a demand notice would be sent to realise the cost of excess production", said a state government official.

An MCL source said the company was yet to receive any letter and could comment only after reviewing the government notice.

The state government is issuing notices to extract the cost of minerals raised in excess of the limits set under environment clearance, mining plan endorsed by Indian Bureau of Mines (IBM), consent to operate awarded by the State Pollution Control Board (SPCB) and Forest (Conservation) Act.

Earlier, the state department of mines had sent notices to iron and manganese ore miners in two tranches, demanding recovery of almost Rs 20,000 crore. The notices were issued to the defaulting mining companies in compliance with the Supreme Court order of August 2 in a case filed by the NGO Common Cause with respect to rampant illegal mining in Odisha.

The court had ordered recovery of 100 per cent cost of overproduction by the miners for producing beyond the EC limits. Though the court order was related to iron and manganese ore mines, the state government is going a step further and imposing penalties on non-ferrous mines.

The state government, meanwhile, is readying the notices to be sent to chromite, bauxite and other non-ferrous minerals.

"The figure for the value of excess mining in chromite, bauxite and other non-ferrous mines has been tentatively worked out at around Rs 5,000 crore. We are working on the final compensation to be paid by the lessees", the official said.