Non-ferrous mining leaseholders face crackdown

Odisha to send Rs 27,000-cr demand notices to firms for over-extraction

After iron and manganese ore mines, it could be the turn of non-ferrous mine leaseholders in Odisha to cough up hefty penalties for extracting ore “beyond the approved limits”.

The Odisha government has prepared draft notices to recover the cost of excess production from coal and other non-ferrous mines like chromite, limestone, and dolomite. 

The notional value of overproduction by coal mines has been assessed at Rs 22,000 crore. For chromite and other non-ferrous leases, the compensation figure works out to be Rs 5,000 crore. Total compensation to be forked out by mining companies could go beyond Rs 50,000 crore, said an industry source.

In case of coal, Coal India subsidiary Mahanadi Coalfields Ltd (MCL) is a major contributor to overproduction. GMR is another company on the list. For chromite, primarily the mines held by Tata Steel and Indian Metals & Ferro Alloys Ltd (IMFA) have been named. Notices would be sent to them after taking legal view, said a government official.

A senior MCL executive said the company could react only after getting the demand notice, while the other three companies either didn’t reply or could not be reached for comment. 

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 the Union mines ministry. Other private sector companies preferred not to discuss the issue.

Earlier, 152 iron and manganese leaseholders in the state were slapped with demand notices amounting to Rs 17,576.16 crore. The figure for penalty is as calculated by the apex court-appointed Central Empowered Committee (CEC). Additionally, these miners would be dispatched the second set of notices for recovering Rs 5,050 crore more for violations noted under the Forest (Conservation) Act and exceeding the limits set in the Indian Bureau of  Mines (IBM)-approved mining plan and consent to operate granted by the State Pollution Control Board (SPCB). The combined amount of compensation to be paid by iron and manganese ore lessees adds up to around Rs 23,000 crore.

The state government is raising demand notices on defaulting miners by invoking Section 21(5) of the Mines and Minerals (Development and Regulation) Act. The government is complying with the Supreme Court order dated August 2 in the Common Cause case pertaining to rampant illegal mining in Odisha. The court ordered the recovery of 100 per cent cost of overproduction by the miners. 

Though the court order was related to iron and manganese ore mines, the state government is going a step further and imposing penalties on non-ferrous mines. “There can be no discrimination between the nature of minerals as far as raising demand notices is concerned. We have got the notices ready for coal and the balance non-ferrous leases. After getting a favourable legal opinion, the notices would be sent to the miners,” said a senior Odisha government official.

It is not known what repercussions the demand notices could have on coal and other non-ferrous mines. Since the notices have the potential to be legally challenged, the department of mines is likely to call the lessees concerned.