Honorable Supreme Court of India has issued judgement on illegal iron ore mining case in the state of Odisha on 02 Aug’17. In a common cause notice issued to Odisha based merchant miners, they were alleged of excess production beyond the granted EC (Environmental Clearance) limits. In its order the Supreme Court (SC) called for recovery of 100% compensation in lieu of the excess ore lifted.
According to the CEC report, miners illegally extracted 215.5 MnT of iron and manganese ore in Odisha between 2000-01 and 2010-11. According to CEC the notional value of the minerals produced without an environmental clearance or in excess of the environmental clearance, at the weighted average price of the minerals as proposed by the Indian Bureau of Mines comes to about INR 17091.24 crores for iron ore and INR 484.92 crore for manganese ore making a total of INR 17,576.16 crore.
Mining companies involved in the case include Tata Steel, Essel Mining & Industries Ltd, Indrani Patnaik, Rungta Mines, Serajuddin & Company and even state-run entities like Odisha Mining Corporation (OMC).
Odisha iron ore production
| S.No. | Mines Name | 2017(Till Oct) | 2016 |
| 1 | Tata Steel | 10.2 | 11.08 |
| 2 | SAIL | 5.7 | 6.71 |
| 3 | OMC | 3.1 | 4.62 |
| 4 | Essel Mining | 3.43 | 3.69 |
| 5 | TMPL (Tarani Minerals) | 1.67 | 0.12 |
| 6 | KN Ram | 1.67 | 2.65 |
| 7 | Mesco Steel | 2.78 | 2.72 |
| 8 | Serajuddin | 9.78 | 9.89 |
| 9 | Kaypee | 5.3 | 4.82 |
| 10 | KJS | 5.53 | 6.13 |
| 11 | KMC (Kalinga Mining Corp.) | 0.61 | 0.91 |
| 12 | Indrani Patnaik | 3.39 | 4.35 |
| 13 | Rungta Mines | 18.87 | 21.74 |
| 14 | Others | 8.47 | 13.44 |
| Total | 80.5 | 92.88 |
Fig in MnT
Provisional data
Source: Odisha govt, SteelMint Research
Odisha based miners had requested the court to extend the deadline for the payment of compensation.
In the latest update received regarding the case, the Apex Court has turned down the request put up by the miners regarding revision in penalty amounts and extension of deadline to pay the amount.
As per a market source report to SteelMint, in the hearing conducted today (13 Dec’17) the Supreme Court has directed the miners to pay the compensation as recommended by CEC on or before 31 Dec’17 failing which the mines will be ceased from operating.
How will it impact Indian iron ore industry ?
The case involves majority of the operating mines in Odisha. We expect the major mines shall manage to pay the penalty amount by the desired time line and continue operations. However small mines may face issue in paying the penalty amount.
Despite this, state’s iron ore production may not be impacted negatively to a greater extent as the smaller mines constitute a less share in state’s production.
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