NewKerala.com

Key Points

Tata Steel has received a Rs 1,902 crore demand notice from Odisha's mining authorities over alleged mineral dispatch shortfalls. The notice pertains to the Sukinda Chromite Block and follows revised pricing assessments by the Indian Bureau of Mines. Tata Steel disputes the claim, calling it unjustified, and plans legal action. The company's performance security may be used to recover the disputed amount.

Key Points: Tata Steel Faces Rs 1,902 Crore Demand Notice from Odisha Govt

  • Odisha mining authorities cite Rule 12A for revised assessment
  • Tata Steel disputes demand as unjustified
  • Notice linked to Sukinda Chromite Block operations
  • Company plans legal challenge against appropriation of security
2 min read

Tata Steel gets Rs 1,902 crore demand notice from Odisha govt

Odisha mining authorities demand Rs 1,902 crore from Tata Steel over alleged mineral dispatch shortfall in Sukinda Chromite Block.

"The Management believes that the State's demands lack justification and substantive basis. – Tata Steel"

Mumbai, July 4

Tata Steel on Friday said that it has received a demand notice of Rs 1,902.72 crore from the Deputy Director of Mines in Jajpur, Odisha.

The notice relates to an alleged shortfall in the dispatch of minerals from the company’s Sukinda Chromite Block.

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.

The mining authorities issued the notice on July 3 under Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016. They have also moved to use the company’s performance security amount to recover the dues.

“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 revision in assessment is based on declaration of average sale price notified by the Indian Bureau of Mines,” the company added in its filing.

The shortfall in mineral dispatch is said to have taken place during the fourth year of Tata Steel’s mining agreement -- from July 23, 2023, to July 22, 2024 -- under the Mine Development and Production Agreement (MDPA) for the Sukinda block.

Tata Steel has disagreed with the demand. The company said the claim has no justification or proper basis, and it plans to challenge the notice through legal channels.

“The Management believes that the State's demands lack justification and substantive basis,” the firm stated.

“Accordingly, the company will pursue suitable legal remedies before the appropriate judicial or quasi-judicial forum(s),” the company added.

Sukinda, located in Odisha’s Jajpur district, is one of the largest chromite reserves in the country and plays a key role in Tata Steel’s raw material supply.

- IANS

Share this article:

Reader Comments

P
Priya S
Rs 1900 crore is no small amount! If there's indeed a shortfall in mineral dispatch, the government is right to claim what's due. But Tata Steel's reputation makes me think there might be more to this story.
A
Arjun K
Typical government harassment of industries! First they create complex rules, then change calculations suddenly. This will only discourage investment in Odisha's mining sector. #EaseOfDoingBusiness
S
Sarah B
As someone working in corporate law, I find this interesting. The mention of Rule 12A suggests this might be about royalty payments rather than actual mineral quantities. Tata Steel's legal team will have their work cut out!
K
Karthik V
Both sides need to be transparent here. Government should publish their calculation method, and Tata should disclose their dispatch records. Public trust is at stake for both institutions.
M
Meera T
Hope this doesn't affect the local employment in Sukinda! Many families depend on Tata Steel's operations there. The government should consider the human impact before taking harsh actions.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50