Mining has been halted at Sarda Mines (SMPL) after the company was accused of exceeding its permitted production limit once again. On May 28 SMPL was also served with a notice for producing 2.154 mnt or INR 1,042 crore worth iron ore in excess of its EC limit during FY 2020-21.
Background
The Supreme Court on 15 January of 2020 allowed SMPL to resume operations at Thakurani B in Odisha. A year later, in January this year it was sent a show cause notice for excessive mining to the tune of INR 2056 crore during the months of February and March of 2020.
Odisha’s mining directorate was relying on the SC’s order that requires production to be spaced out equally through the year. If the miner is left with two months of the financial year, he may then only produce only a sixth of his annual EC limit. Sarda evacuated 13.5 million tonnes in just two months. Under Section 21(5) of the mining act, as interpreted by the SC, the state can recover the entire value of this excess amount.
SMPL’s lease expires on 13 August 2021. Using the same reasoning for the remaining months the lessee has, the directorate has accused the company of breaking the law again. “You are supposed to make production of 14,62,365 tonne of iron ore on a pro-rata basis of the quantity stipulated in EC granted by the Ministry of Environment and Forest on September 22, 2004 during the remaining period of the lease from April 1, 2021 to August 13, 2021.”
Data with the directorate says the mines produced 22,75,848 t already — 15,03,794 t in April and 7,72,054 t by May 20, claims a media report.
Odisha also claims SMPL owes it INR 620 crores in differential mineral taxes for which a notice was issued last month. The state is yet to receive anything as fine against any of these notices. There is also the matter of the MoEF which believes Sarda is operating with an EC granted under a 1994 notification no longer valid. It directed the state government in September last year to stop operations at the mine, which have continued after the Delhi High Court granted the company a stay against any action from the state.
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