By Imteshal Karim
Tata Steel has come under fire from the Odisha government which has issued a demand notice of Rs 1902.72 crore for an alleged shortfall in mineral dispatches from the companyrsquos 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 Steelrsquos 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 companyrsquos performance security amount toward recovery.
Company Calls Demand Arbitrary Plans Legal Recourse
Tata Steel has strongly disagreed with the Odisha governmentrsquos assessment. In its stock exchange disclosure the steel major stated that ldquothe Management believes that the States demands lack justification and substantive basis.rdquo
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 Steelrsquos ferroalloy and stainless steel operations. The mine plays a crucial role in the companys vertical integration strategy.