Firms to fight Odisha fine

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Mining and metal companies may challenge the Odisha government notices to them for illegal and excess mining of iron ore.

A total of 104 companies face a collective fine of Rs 76,000 crore. “We have already sent notices to them and asked them to reply within 30 days,” Deepak Kumar Mohanty, mines director of Odisha, told Financial Chronicle.

The companies include Tata Steel, Essel Mining & Industries of the Aditya Birla group, Rungta Mines (the flagship company of S R Rungta), Orissa Mining Corporation and Orissa Minerals Development Company, according to Mohanty.

The Odisha government’s move comes after similar steps in Karnataka and Goa, where mining is either under partial ban or carried out under strict vigilance.

The companies now plan to challenge the notices and fine on the ground that the state government cannot invoke the Mines and Minerals Development and Regulation Act of 2010.

“This is a central act and, therefore, no state government can issue a penalty notice on the basis of that,” said an official of a company named by the Odisha government.

One of the named companies, Tata Steel, is working toward opening a channel of negotiation with the Odisha government on the issue. The company has mines in Joda, Sukinda and Khondbond in Odisha, which supply iron ore to its Jamshedpur steel plant. The company faces a fine of Rs 6,000-7,000 crore for alleged excessive mining.

Tata Steel officials told Financial Chronicle that it was a ‘technical issue’ and there was enough scope to make the authorities understand the issue in the true perspective through dialogue.

Some officials said the Odisha notice had possibly been issued in haste.

The official spokesman of Tata Steel said, “The Union government has recently brought a notification defining irregularity in mining operations and illegal mining. This distinction is an important aspect of the whole issue of the demand put forth by the state government. We are confident of resolving the issue with the government amicably.”

“We reiterate our contention that we have always undertaken mining in Odisha and also in other states where we operate in strict conformity with the existing laws,” he said.

Meanwhile, Tata Steel has already asked its officials to prepare a detailed response to help state government officials understand the technicality of the issue and resolve it across the table.

A senior official from the Aditya Birla group, which owns Essel Mining, said, “The mines are allocated by the government and we pay tax and royalty as per norms; and mining activities are also as per norms mentioned in the agreement. Why then should we be penalised? We will definitely fight the case.”

The spokesperson of the group, however, said the company had not yet decided whether to go to court but “a decision is likely on Wednesday.”

Essel Mining & Industries is among the largest non-captive iron ore mining companies in the private sector and the largest producer of ferro alloys in India. Its iron ore operations are in the Barbil-Joda belt of Odisha. It operates three mines there -- at Jilling, Kasia and Koira.


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