Mining firms in Odisha scurry to pay SC-ordered penalty

Mining entities in Odisha are in a rush to fork out penalties ordered by the Supreme Court (SC) for overproduction during 2000-11, as the December 31 deadline looms.

The companies need to pay about ~17,576 crore in compensation for extracting iron and manganese ore beyond the limits approved earlier under environment clearance (EC) rules. After the SC ruled out any extension in payment deadline, the firms are making intense effort to save their operational leases. The top court also ruled out payment in instalments.

“All big captive and merchant mining companies would pay the compensation amount to save their leases. Tata Steel, Rungta Mines and Essel Mining & Industries have already done so. All operational mines are expected to meet the deadline. For mines out of operations, it would be tough for the leaseholders to make timely payment,” said a mining industry source.

The SC judgment was dated August 2 this year. It had directed the state government to extract the cost of excess production from the defaulting miners. The SC called for recovery of the entire compensation amount, compared to only 30 per cent recommended by the Central Empowered Committee (CEC), a panel appointed by the judges to probe allegations of large-scale illegal mining in the state. The court was adjudicating on a petition in this regard by Common Cause, a non-government entity.

Complying with the SC order, the Odisha government issued demand notices for EC violations on 150odd iron and manganese ore lessees.

Government officials confirmed that miners had started depositing the money. “The companies have (so far) paid ~2,000 crore. We expect the figure to (now) move up sharply,” said one. The funds would accrue to Odisha Mineral Bearing Areas Development Corporation, tasked with periphery development of mined areas.

Odisha Mining Corporation is saddled with the biggest penalty amount of ~2,178 crore. R Vineel Krishna, managing director, said they'd pay latest by Friday. Others with steep penalty burdens include Sharda Mines ( ~1,983.9 crore), Essel Mining ( ~1,102 crore), Mesco Steel (~924.7 crore), Orissa Minerals Development Company (~642 crore) and Tata Steel (~614 crore).