Sarda Mines could be slapped with another claim, this time for a differential royalty that could run into a few hundreds of crores.
In a letter to his colleague in Joda, Odisha’s Director of Mines had asked for tabulation of exactly how much the miner (which sells most of its material to Jindal Steel and Power) owes the state exchequer.
Sarda Mines says it paid royalty before 2014 when operations were stopped, this includes for material mined between FY 2005 up to FY 2009 when royalty was levied at a flat rate of INR 27. The iron ore miner was only allowed to resume mining and despatches in Jan’20. Odisha’s Steel and Mines department however, is of the view that royalty is to be paid at the time of despatch — as has been interpreted by the SC in Tata Steel matter — must pay royalty applicable on the iron ore prices of early 2020 when it was despatching the earlier mined ore.
SteelMint has seen a copy of this letter dated 16 Mar’21 which requires the Deputy DM in Joda to calculate “the exact amount of differential royalty and other dues i.e. DMF and NMET in respect Thakurani Block ‘B’ iron ore mines of Sarda Mines Pvt. Ltd … and issue a demand notice to the lessee at the earliest.”
Officials in the department, speaking on condition of anonymity, said they were yet to calculate the amount due. According to industry sources and a back of the envelope estimate this could near INR 600 crores.
In January Odisha had slapped INR 2056 crore claim on Sarda Mines accusing it of despatching its entire annual permissible volume within two months of being allowed to resume operations. The company had not been given a hearing and was successful in getting a stay from the courts and as on Wednesday, the 17th of March continues to remain operational.
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