One of the key defaulters in paying compensation for the excess lifting of iron ore, Sarda Mines may not get a major respite even after the Supreme Court’s order to its central empowered committee (CEC) to have fresh look at the penalty figure burdened on the lessee.
In November 2018, the apex court directed the CEC to rework the compensation raised on Sarda Mines amounting to Rs 1938 crore. The miner had to fork out the compensation as per demand notice slapped by the Odisha government for the excess raising of mineral ore between 2000-01 and 2010-11. Total penalty slapped on all erring lessees aggregated to Rs 17,576 crore- a figure calculated by the CEC on orders by the Supreme Court in a case of rampant illegal mining in Odisha.
The deadline for paying the compensation was fixed on December 31, 2017. Later, the apex court had condoned the delays in payment for some miners- primarily state-run Odisha Mining Corporation (OMC) and Aditya Birla controlled Essel Mining & Industries Ltd with interest of 12 percent. However, Sarda Mines remained adamant and instead, challenged the CEC report in the apex court.
Industry watchers believe no big relief is on the cards for the besieged miner save the exemption from interest payments if the revised compensation is complied with on time.
“The major contention in case of Sarda Mines is the row over run of the mine (ROM) and lumps. Both the products were supposedly merged while determining the penalty. But even with the revision in the calculation, Sarda Mines will not enjoy any major relief. The only bout of relief will be the exemption in interest payments should they clear the backlog in time upon receipt of fresh notice”, said a mining industry source.
Odisha government officials averred they do not have a key role in reworking the figure. “That work is predominantly in CEC’s domain. We’re only assisting them with some documentation”, said a senior official.
As per the court’s direction, the mining authorities in Odisha are supposed to send a fresh notice to the errant miner after the penalty figure is reassessed.
The apex court in its order, distinguished the terms ‘ROM’ and ‘lumps’. “It must be clearly understood that extraction of the mineral iron ore is the extraction of iron ore Run of Mine or ROM. Lumps of iron ore are, in a sense, a by-product of ROM as are topsoil, mineral rejects, sub-grade ore and fines and the distinctions made are for the purposes of payment of royalty’, the court pronounced.
Sarda Mines is in the dock along with other major players like Mesco Steel and central government run Orissa Minerals Development Company (OMDC), facing certificate proceedings at sub-divisional courts in Keonjhar and Sundargarh, the two districts with the highest iron ore output.
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