Odisha Govt issues Rs 1,902 crore demand notice to Tata Steel for mining shortfall

Bhubaneswar: The Odisha government has issued a demand notice of Rs 1,902.72 crore on Tata Steel Limited over alleged shortfall in dispatch of minerals from the company’s Sukinda chromite block in Jajpur.

The block is one of the largest chromite mines in the country and a critical reserve for the steel major’s raw material supply.

According to a stock exchange filing by Tata Steel, the demand is based on a revised calculation of average sale prices provided by the Indian Bureau of Mines. It includes the sale value of shortfall quantity and appropriation of performance security.

“On July 3, Tata Steel Limited has received a demand letter issued by the Office of Deputy Director of Mines, Jajpur, in connection with revised assessment of shortfall in dispatch of minerals from the Company’s Sukinda Chromite Block, for the fourth year in terms of Mine Development and Production Agreement (i.e., July 23, 2023 through July 22, 2024) in alleged violation of Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016, and consequent appropriation of performance security,” the company said in its filing.

The shortfall pertains to the period from July 23, 2023, to July 22, 2024, under the Mine Development and Production Agreement for the Sukinda block. The deputy director has stated that steps would be initiated to appropriate the steel manufacturer’s performance security to recover the alleged dues.

Tata Steel clarified that the calculation could be based on the state’s revised price methodology rather than any actual discrepancy in dispatch volumes. “The management believes that the state’s demands lack justification and substantive basis. Accordingly, the company will pursue suitable legal remedies before the appropriate judicial or quasi-judicial forum(s),” it stated.