SC asks Odisha to take steps to collect Rs 70 bn unpaid penalty from miners

Payment of fine with penalty may reopen closed mines and boost iron ore output

Dillip Satapathy Jayajit Dash Bhubaneswar

Last Updated : Jan 31 2018 | 5:15 AM IST

The Supreme Court on Tuesday ordered the Odisha government to take steps to collect over Rs 70 billion (Rs 7000 crore) unpaid compensation from the iron ore and manganese mine owners towards excess mining perpetrated in the state.

The court also asked the state-owned Industrial Development Corporation (Idcol) to pay interest at the rate of 12 per cent per annum for the period of delayed payment of the compensation after the expiry of the deadline on 31st December.

The condoning of delayed payment by Idcol has raised hopes among other defaulting miners to pay their dues along with the court stipulated interest and restart operation. If that happens the iron ore production in the state may revive from next fiscal beating all dismal projections.

After the December 31 deadline lapsed, the Odisha government had stopped operations of seven working iron and manganese ore mines for non-receipt of the penalty money. The shutdown of these mines knocked off about 20 million tonnes in annual iron ore mining capacity. The deficit in January-March quarter is estimated to be around three million tonnes.

The closure of working iron ore mines triggered unprecedented hikes in prices by both Odisha miners and National Mineral Development Corporation (NMDC). Iron ore lumps prices climbed up by Rs 400-500 per tonne.

"Once production resumes from the closed mines, there would be ample supplies and this will arrest any further hike in prices. Besides, there are some non-working mines who have paid penalties and they are expected to restart operations after other statutory violations cases against them are resolved", said a miner.

The apex court, in August last year, had said that the iron ore and manganese raised by miners between 2000-01 and 2010-11 beyond the statutory approvals like forest and environment clearance be considered illegal and called for the recovery of 100% compensation towards the value of excess ore lifted by them, calculated at Rs 175.76 billion (Rs 17,576 crore) by the Central Empowered Committee (CEC) appointed by the Supreme Court earlier.

The Odisha government had issued notices to 131 errant mine owners. Out of them, 72 miners had fully or partially paid the compensation by the year-end while few more like Idcol and Aditya Birla group-owned Essel Mining had deposited the penalty amount after the due date. Altogether, Rs 101.87 billion (Rs 10,187 crore) has been collected from the errant miners till date.

Restarting operations by some key non-working iron ore mines, especially the ones held by Essel Mining would help add nearly 30 million tonnes in iron ore production each year.

Sources said, 44 of the 131 mines, which were noticed by the government, are yet to pay the compensation. Following today's Supreme Court order, the state government is expected to explore the provision of the existing laws and mining rules to collect the Rs 73.89 billion (Rs 7389 crore) unpaid fine from the defaulting miners.

"The existing law allows 60 days' time for recovery of government dues from defaulting parties", said an official. After giving them the required time, certificates case can be filed against the errant miners for seizure of their assets and cancellation of their mining lease for realisation of the unpaid dues, he added.

Major miners who made full payments