Tata Steel, GMR in Odisha list for excess mining, face Rs 27,000 cr fine

State has prepared draft notices for extracting cost of excess production from coal and other non-ferrous mines like chromite, limestone and dolomite

After iron and manganese ore mines, the non-ferrous mine leaseholders in Odisha might be next in line to cough up penalty for extracting ore beyond the approved limits.

Odisha government has prepared the draft notices for extracting the cost of excess production from coal and other non-ferrous mines like chromite, limestone and dolomite. The notional value of over-production by coal mines has been assessed at Rs 22,000 crore. For chromite and other non-ferrous leases, the compensation figure is around Rs 5,000 crore, which means an additional penalty of Rs 27,000 crore. The total compensation to be forked out by the mining companies could well go beyond Rs 50,000 crore, said an industry source.

In case of coal, Coal India-subsidiary Mahanadi Coalfields Ltd (MCL) is the major contributor to overproduction. Other companies in the list, prepared by the state government, which have exceeded permitted production or indulged in over-production include GMR. For chromite, primarily the mines held by Tata Steel and Indian Metals & Ferro Alloys Ltd (IMFA) have also been named. All three companies either didn't replied or could not be reached for comments. However notices to them will be dispatched now, said a government official.

When contacted, a senior MCL executive declined to comment, citing the company could react only after getting any demand notice. A leading ferro-chrome producer said, demand notices for chromite leases would not be legally tenable, as, such a case was earlier stayed by the Revision Authority under Union mines ministry.