Odisha slaps Rs 83 bn demand notice on Coal India firm for illegal mining

Notice for collection of fines from Tata Steel, Jindal Stainless, Balasore Alloys soon

The Odisha government has slapped a demand notice of Rs 82.97 billion on Mahanadi Coalfields Ltd (MCL), the second largest subsidiary of Coal India Ltd (CIL), for unlawful production of coal in violation of environmental clearance (EC).

The state is also in the process of sending demand notices of Rs 45 billion to some of the large chrome ore miners including Tata Steel, Jindal Stainless, Indian Metals and Ferro Alloys (IMFA) and state Odisha Mining Corporation (OMC) for similar violations.

This follows Odisha government's decision to extend the scope of the Supreme Court order on illegal iron ore and manganese mining in the state, in which the Apex court had interpreted the section 21 (5) of the mines and mineral development and regulation (MMDR) Act differently.

Whereas illegal mining under relevant section of the Act was earlier perceived to be mining outside the leasehold area, the August 2, 2017 order of the court inferred that raising of ore without the requisite support of environment and forest clearances (FC) would also be considered as illegal mining.

Hence, the court asked the state government to recover the amount equivalent to the price of mineral so raised as compensation. The period for which the irregularities were taken into account was from 2000-01 to 2010-11.

Though the court order came while disposing of a case relating to illegal mining of iron ore and manganese in Odisha, the state government has decided to expand the scope of the judgement to other minerals like coal, chromite, bauxite and lime stone as the court in general has given a new interpretation to the section 21 (5) of the MMDR Act which governs mining of all major minerals.

So, after collecting more than Rs 117 billion compensation from the errant iron ore and manganese miners who had excavated beyond their EC and FC sanctions, the state government has focused its attention on similar violations in other minerals.

In response to the show cause notice from the Odisha government preceding the demand notice, Coal India subsidiary MCL had stated that the ramification of the Supreme Court judgement should not be applicable to them as it pertained to iron ore and manganese leases. Besides, they argued that they being guided by Coal Bearing Areas (Acquisition and Development) Act, 1957, the changes in interpretation of section 21 (5) of MMDR Act should no way affect them.

However, the state government has rejected the MCL plea saying the Coal Bearing Areas (Acquisition and Development) Act is applicable only for acquisition of land for coal excavation, while the mining activity is governed by MMDR Act.

Meanwhile, the state is working out the compensation demand for EC violations by some of the leading chromite miners. The amount is estimated at about Rs 45 billion. The errant companies include state-owned Odisha Mining Corporation (Rs 16.6 billion), Tata Steel (Rs 15.75 billion), Jindal Stainless (Rs 1.26 billion), IMFA (Rs1.4 billion), Balasore Alloys (Rs 3 billion), FACOR (Rs 2.01 billion), IDCOL (Rs 3.37 billion), Misrilal (RS 0.42 billion), B C Mohanty (Rs 1.22 billion). The demand notices will be sent to them soon, said the sources.