TV
Tata Steel has come under fire from the Odisha government, which has issued a demand notice of Rs 1,902.72 crore for an alleged shortfall in mineral dispatches from the company’s Sukinda Chromite Block in Jajpur district.
The notice, dated July 3, was issued by the Office of the Deputy Director of Mines, Jajpur, under Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016. It pertains to the fourth operational year of the Mine Development and Production Agreement (MDPA), specifically from July 23, 2023, to July 22, 2024, according to The Times of India.
The company, however, has rejected the claim, calling it baseless and preparing to contest it through legal channels.
According to Tata Steel’s regulatory filing, the hefty demand arises from a revised calculation of average sale prices, as notified by the Indian Bureau of Mines (IBM).
The mining authorities have alleged a dispatch shortfall based on these recalibrated prices and moved to appropriate the company’s performance security amount toward recovery.
Company Calls Demand Arbitrary, Plans Legal Recourse
Tata Steel has strongly disagreed with the Odisha government’s assessment. In its stock exchange disclosure, the steel major stated that “the Management believes that the State's demands lack justification and substantive basis.”
The company maintains that the demand is not linked to actual discrepancies in mineral volume dispatch, but rather stems from a revision in pricing metrics, a move it argues is neither transparent nor contractually grounded.
It is worth mentioning that the Sukinda Chromite Block, located in the Jajpur district, is one of the largest chromite reserves in India. It is a key source of raw material for Tata Steel’s ferroalloy and stainless steel operations. The mine plays a crucial role in the company's vertical integration strategy.
