Indian iron-ore mines served with $12.5bn in fines

By: Ajoy K Das
7th November 2012
KOLKATA (Mining Weekly) -  The government of the East Indian province of Orissa has issued notices to 103 iron-ore mines slapping them with a combined fine of $12.5-billion for the violation of statutory laws and extracting ore in excess of permissible limits.

According to a statement issued by a government official, three lists of mining companies had been drawn up and notices had been issued to all 103 miners figuring in these lists. The violations by these mining companies had been reported to the Indian Bureau of Mines (IBM) but since the latter did not take any action the provincial government was forced to act, the official said.

The notices have been served over the past two months under the Mines and Minerals Development and Regulation Act to 103 companies and another 90 other miners would be issued notices for similar isolation of laws and fines imposed shortly, according to officials in the provincial government.

It may be noted that the M B Shah Commission, appointed by the Indian Supreme Court to investigate illegal mining across the country, was currently in the process of making enquiries into violations of law by mining companies operating in Orissa.

Orissa, on the Bay of the Bengal coast, was among the most mineral rich provinces of India accounting for 34% of the country’s total 28.52-billion tons of iron-ore resource in the country. In 2011/12 the mines located in the province produced 50-million tons of iron-ore down from 76-million tons in the previous year.

The latest clampdown on illegal mining in Orissa would have severe impact on iron-ore availability for exports and domestic consumption since mining in other producing provinces like Karnataka and Goa had already been banned following investigations establishing violations of mandatory production and environmental laws.

The 103 companies served with notice and fines included such mining and metal majors like Tata Steel and Essel Mining and Industries Limited.

In an official statement Tata Steel said that the company had received notice from the government and would revert to the government with its submission.

“We reiterate our contention that we have always undertaken mining in Orissa and also in other states where we operate, with strict conformity with the existing laws. We are confident of resolving the issue with the government amicably,” Tata said.

According to an official in a mining company served with the notice who spoke on condition of anonymity since the issue could move to the courts, the government of Orissa had not made the fine distinction between ‘irregularity in mining’ and ‘illegal mining’.

The federal government recently come out with a notification defining ‘irregular mining’ and ‘illegal mining’ which had not been taken into consideration while serving the notice for imposition of fine and that the allegedly offending miner would take the plea excess production was well within the 20% excess mining which was permitted in the sanctioned mining plan, the official said.

Edited by: Esmarie Swanepoel