Tata Steel gets ₹1,902 crore demand over Sukinda Mine dispatch shortfall

Revised assessment cites breach of mineral rules and shortfall in dispatches from Sukinda Chromite Block; Tata Steel plans legal action against the demand

Tata Steel Limited on Thursday received a demand letter issued by the Office of Deputy Director of Mines, Jajpur, related to a revised assessment of a shortfall in the dispatch of minerals from the company’s Sukinda Chromite Block for the fourth year of the Mine Development and Production Agreement period (from 23 July 2023 to 22 July 2024), the company said in a BSE filing.

 

The demand has been raised for an alleged breach of Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016, and the consequent appropriation of performance security. The revised assessment is based on the declaration of average sale price as notified by the Indian Bureau of Mines. 

 

Details of the demand

The authorities claim that there has been a shortfall in mineral dispatch from the Sukinda Chromite Block as per the Mine Development and Production Agreement. As a result, an aggregate demand has been raised for ₹1902,72,53,760/- including sale value of shortfall quantity and appropriation of performance security.

 

The management is of the view that the state’s claims are neither justified nor well-founded. Therefore, the company intends to seek appropriate legal recourse through the relevant judicial or quasi-judicial authorities, the company added.

 

"This disclosure is being made by the Company in line with Regulations 30 and 51 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015," it added.