Odisha government tightens screws on non-performing mining leaseholders

Trouble has intensified for underperforming mining leaseholders. In cases where leaseholders fail to extract the minimum quantity of minerals as stipulated in their lease conditions, the government will now step in and carry out mining operations itself.

As per the directive, the state government will extract minerals from such mines through the public sector undertaking NMDC (National Mineral Development Corporation). The entire cost incurred for this extraction will be recovered from the non-performing leaseholders concerned.

The Orissa High Court issued this direction while hearing a Public Interest Litigation (PIL) filed by the Citizens Action Forum. The court observed that if leaseholders violate lease conditions by extracting minerals below the prescribed limit, the state government is empowered to take action under the General Concession Rules, 2016.

Invoking Rule 12(1)(EE) of the General Concession Rules, 2016, the court directed that the state government may ensure the extraction of the required quantity of minerals from the leased mines through NMDC. The expenses for such operations will be recovered from the respective mining leaseholders by the state government.

Odisha holds nearly 28 percent of the country’s iron ore reserves. At present, leases have been granted to 63 legally operating iron ore mines in the state. As per environmental clearances, these mines together are permitted to produce around 246 million tonnes per annum (MTPA) of iron ore.

However, during the 2024–25 financial year, only 159 MTPA of minerals were produced from these mines. This accounts for merely about 64 percent of the approved production capacity. It was alleged that despite such significant underproduction, the government had failed to take adequate action, prompting the filing of the PIL.