Mining firms to contest Odisha's Rs 2,900-cr demand notice

Notice pertains to realise the cost of excess production beyond the limits approved under Mining Plan endorsed by the IBM

Mining companies in Odisha are gearing up to challenge a demand notice amounting to Rs 2,900 crore clamped by the state government. The notice pertains to realise the cost of excess production beyond the limits approved under Mining Plan endorsed by the Indian Bureau of Mines (IBM), consent to operate granted by the State Pollution Control Board (SPCB) and violation of Forest (Conservation) Act, 1980.

The notice, the second in a row by the state government since the Supreme Court order in a case of rampant illegal mining in Odisha filed by the NGO Common Cause, has the miners livid. The miners argue the apex court order did not point to recovering penalties for other violations save the environment clearance (EC). For iron and manganese ore production limits exceeding the EC limits, the state government had sent a demand notice, seeking Rs 17,576.17 crore — a figure worked out by the court-appointed central empowered committee (CEC).

"The second demand notice raised by the state government is against the spirit of the Supreme Court order. Individual miners are going to contest this notice and file a case anytime soon with the Revision Authority (under Union mines ministry)", said Prabodh Mohanty, secretary with the Eastern Zone Mining Association (EZMA).

The Rs 2,900-crore demand notice was slapped on 23 miners violating the Forest (Conservation) Act and 151 others for other statutory non-compliances. After dispatching the notice, the state government had called the defaulting lessees for a hearing. Justifying the demand notice, director of mines (Odisha) Deepak Mohanty had said previously that the statutory violations were treated as excess production.

But, miners feel there is no mention of Forest, Air & Water Acts in the Supreme Court order and hence, the compensation is not payable.

According to the CEC report, miners in Odisha illegally extracted 215.5 million tonnes of iron and manganese ore in Odisha between 2000-01 and 2010-11. Mining companies in dock include Tata Steel, Essel Mining & Industries Ltd, Indrani Patnaik, Rungta Mines, Serajuddin & Company and even state-run entities like Odisha Mining Corporation (OMC). They need to pay the compensation latest by December 31 this year.

Miners have prayed to the Supreme Court to extend the deadline to pay the compensation and allow them to fork out the money in tranches.

In its judgement on August 2 on the writ petition filed by Common Cause, the Supreme Court ordered recovery of 100% compensation from the miners.