Vedanta receives Rs 9.74-billion penalty for illegal mining royalty

The notice directs Vedanta to pay the principal royalty amount of Rs 5.48 bn within 14 days and the interest of Rs 4.30 bn in the next 7 days

In a move to recover the gains made from alleged illegal mining, the Goa's directorate of mines and geology has issued a Rs 9.74 billion demand notice to Vedanta towards non-payment of royalty for the financial years 2011 to 2013.

The company is alleged to have illegally mined iron ore to the tune of 20,76,746 tonne during this period, according to the directorate of mines and geology (DMG).

The notice, issued on Tuesday by the DMG, Prasanna Acharya, directs Vedanta to pay the principal royalty amount of Rs 5.48 billion within 14 days and the interest of Rs 4.30 billion in the next seven days. The total adds up to Rs 9.74 billion

A query sent to the Vedanta spokeman seeking comments was yet to be responded.

Goa had appointed a team of chartered accountants to go into the details of royalty evasion by various miners after being pointed out by MB Shah committee report, which was submitted to the Supreme Court in 2012, claimed that the state saw illegal mining to the tune of Rs 350 billion.

The notice mentions that "mere collection of dues will not absolve the company from any civil or criminal action."

The royalty evasion has been pointed out to total nine iron ore leases of Vedanta in the tiny tourist state.
 

"The audit report prepared by the chartered accountants was summarised by the mining audit committee, which has made several observations, including payment of royalty by you on dry metric tonne basis instead of the wet metric tonne basis in respect of the above-mentioned leases," the notice, copy of which is with PTI, reads.
 

"And as such the differential quantity of 20,76,746 on wet metric tonne on conversion of dry metric tonne to wet metric tonne remains without payment of royalty," it adds.
 

"Therefore, royalty becomes payable for ore extracted and dispatched by you for the financial years 2011 to 2013. The principal royalty amount to Rs 54,48,03,948 and the interest is Rs 43,00,30,642," the notice mentions.

 

The DMG had first issued a show cause notice to Vedanta on August 4, 2016 and was subsequently granted personal hearing in the matter.

"The DMG notice further said the state has rejected your contention justifying payment of royalty on dry metric tonne basis. Therefore, you are liable to pay the principal amount of Rs 54,48,03,948, which is the difference of royalty arrived at by the mining audit committee on the quantity of 20,76,746 metric tonne along with interest at 24 per cent which adds up to Rs 43,00,30,642," the notice says.