Mining penalty: Tata Steel gets Rs 1,902 crore demand notice from Odisha; firm to challenge revised mineral shortfall claim

Tata Steel has received a demand notice of Rs 1,902 crore from the Deputy Director of Mines, Jajpur, for an alleged shortfall in mineral dispatch from its Sukinda Chromite Block in Odisha. The company disclosed the development in a stock exchange filing on Friday and said it would pursue legal remedies.The demand, issued on July 3, relates to a revised assessment for the fourth year of operations under the Mine Development and Production Agreement (MDPA), covering the period from July 23, 2023, to July 22, 2024, PTI reported.According to the filing, “The company 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.”The notice alleges a violation of Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016, and includes a demand totalling Rs 1,902.72 crore, which factors in the sale value of the alleged shortfall quantity and the appropriation of performance security.Tata Steel stated that the assessment is based on the average sale price declared by the Indian Bureau of Mines. However, it maintained that the state’s claims are not supported by facts.“The management believes that the state’s demands lack justification and substantive basis and the Company will pursue suitable legal remedies before the appropriate judicial or quasi-judicial forum(s),” the company said.