SC rules out deadline extension to miners for penalty payments

Published On: 14, Dec 2017 | Source: business-standard.com

The last effort by iron and manganese ore miners in Odisha to extend deadline for paying penalties for overproduction has gone unheeded. The Supreme Court, in a hearing on Wednesday, ruled out any extension in deadline (December 31) for paying compensation, striking a body blow to the hopes of the miners.

Also, the miners' plea to allow them to fork out the compensation amount in tranches failed to find favour with the apex court ordering upfront payment of the entire amount.

The Supreme Court, adjudicating on a case of rampant illegal mining in Odisha filed by NGO Common Cause, on August 2 had ordered for 100 per cent recovery of the illegally mined ore. The court held that the amount to be paid should be the figure rationalised by the (CEC). The CEC, an apex court appointed panel to probe illegal mining in Odisha, had calculated the figure for excess mining beyond the limits approved under environment clearance (EC), at Rs 17,576.17 crore. The report says miners illegally extracted 215.5 million tonnes of iron and manganese ore between 2000-01 and 2010-11.

Complying with the judgment, the Odisha government had raised a demand notice on ‚Äč150-odd iron and manganese ore lessees, seeking to extract Rs 17,576.17 crore as compensation.

Later, the individual miners had petitioned the Supreme Court, praying for extending the deadline and permission for payment in installments.

“The has not allowed any extension in deadline. Miners have to pay the amount by December 31 to continue operations”, said Prabodh Mohanty, secretary, (EZMA).

The denial by the apex court is bound to have far reaching repercussions on Odisha's iron ore production and external supplies to end use industries, notably steel. The state is the biggest producer, accounting for more than 50 per cent of the total iron ore output in the country.

“Most of the small and mid-scale mining leases would be thrown out of operations as they are in no position to pay the hefty penalties. Also, such miners would not be too keen to continue operations as the leases are due to expire by 2020”, said a miner.

EZMA's Mohanty said it would be premature to fathom the implications of the Supreme Court's direction. “Unless we make an assessment of the situation, it would be difficult to predict the impact. The capacity to pay by individual miners has to be assessed. If some mines go out of operations, it would have a bearing on iron ore production.”

A clutch of miners-both captive and non-captive need to cough up the penalty to keep mining operations afloat. Mining companies in dock include Tata Steel, Essel Mining & Industries Ltd, Indrani Patnaik, Rungta Mines, Serajuddin & Company and even state run entities like (OMC).