Odisha to slap Rs 270 bn demand on Tata Steel, others non-ferrous miners

State buoyed success of earlier notices to ferrous miners, through which it mopped up Rs 120 billion

Enthused by the collection of around Rs 120 billion as compensation from iron ore and manganese miners, the Odisha government is preparing to despatch similar demand notices to non-ferrous mine lease owners to extract cost of excess production.

Demand notices seeking to recover Rs 270 billion would be slapped on coal, chromite, bauxite, limestone and other miners. The action follows showcause notices sent to the miners earlier.

“The demand notices would be sent to the non-ferrous lessees in staggered form in respect of violations of environment clearance, forest clearance and other statutory non-compliance. We have already conducted hearing with the leaseholders after sending initial showcause notices. The government believes there can be no discrimination on the basis of minerals”, said a government official.

The government has decided to send the demand notices after due legal consultation, he added.

The state government’s move to extract compensation for illegal production is on the premise of the Supreme Court order (of August 2, 2017) in the case of illegal mining in Odisha filed by NGO Common Cause. The top court had asked for recovery of 100 per cent compensation from the erring miners.

The apex court judgment, however, was limited to iron ore and manganese mines. An industry source said, the Odisha government’s step to recover cost of excess production from the non-ferrous leases might not be legally tenable as there was no specific order from the Supreme Court for minerals other than iron ore and manganese.

The notional value of over production by coal mines in Odisha has been assessed at Rs 220 billion. For chromite and other non-ferrous leases, the compensation figure works out to be around Rs 50 billion, meaning a total penalty of Rs 270 billion.

In case of coal, Coal India subsidiary Mahanadi Coalfields Ltd (MCL) is the major contributor to overproduction. The showcause notice sent earlier to MCL by the state government sought to realise Rs 201.69 billion.

MCL sources had previously confided in Business Standard that the company would decide on legal options if served with a demand notice.

GMR Energy also figures in the list for extracting coal beyond the approved limits.

Among chromite miners, Tata Steel and Indian Metals & Ferro Alloys Ltd (IMFA) figure in the state government’s list of errant miners.

Earlier, 131 iron and manganese lease holders were slapped with demand notices totalling Rs 175.76 billion for environment clearance violations.