The Directorate of Mines and Geology has issued show-cause notices to 65 mine leaseholders, asking them to explain why their mining leases should not be terminated after inspections detected alleged large-scale manipulation of iron ore grades.
Citing significant deviations between the average grade of iron ore dispatched during the first quarter of 2026-27 (FY27) and the grades approved in mining plans, the directorate has also sought explanations from field officials responsible for monitoring ore quality. Business Standard has reviewed the show-cause notices and the communication sent to field officials.
The notices cover mining leases across the Joda, Koira, Jajpur Road, Keonjhar and Baripada mining circles. The leaseholders include major public and private miners such as Odisha Mining Corporation, Tata Steel, Jindal Steel and Power, Steel Authority of India , Bhushan Power and Steel, JSW Steel, ArcelorMittal Nippon Steel India, Rungta Mines, Serajuddin & Co and others.
The action follows inspections by state-level enforcement squads, which found that several leaseholders had consistently downgraded the grade of iron ore dispatched from their mines in deviation from the annual average grade approved in their mining plans. According to the directorate, such practices resulted in lower royalty, auction premium and other statutory dues payable to the government.
In a strongly worded communication, the directorate said grade manipulation, dilution, blending, misclassification and misdeclaration of mineral grades to influence mineral valuation and reduce royalty and auction premium were among the key concerns.
"The field officers have already been instructed to closely monitor production and ore dispatches, but the latest inspections revealed significant deviations despite these directions," the letter said.
The directorate has also sought explanations from deputy directors of mines (DDMs) and deputy directors of mines (assessment), saying the findings pointed to acts of commission and omission despite departmental instructions issued in September 2025.
Besides alleged grade manipulation, the notices flagged illegal sub-leasing of mining leases, production beyond approved limits, unauthorised extraction, suppression of production, unaccounted extraction and other violations of mining regulations.
Officials said the inspections revealed a consistent pattern of grade manipulation, with ore being dispatched at grades substantially lower than those approved in mining plans.
The latest crackdown follows a Comptroller and Auditor General (CAG) report that estimated a revenue loss of ₹4,162.79 crore during 2020-21 and 2021-22 due to alleged undervaluation of iron ore. The findings prompted the Steel and Mines Department to step up inspections and enforcement across mineral-bearing districts.
Mine leaseholders have been directed to submit their replies within 30 days, failing which the government may initiate action, including termination of leases and forfeiture of performance security, under the Mineral Concession Rules, 2016.
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