Penalty of over Rs 1620 crore imposed on NMDC
Raipur
The Chhattisgarh government has levied a substantial fine of Rs 1,620.49 crore on the National Mineral Development Corporation (NMDC), a leading public sector enterprise, for alleged violations in its iron ore mining operations in the Bastar region. The Dantewada district administration issued the penalty, citing non-compliance with mining regulations and environmental norms.
The penalty specifically targets NMDC’s mining activities in the Kirandul Complex, which includes Deposit No. 11, spread over 874.924 hectares, and Deposit No. 14, divided into two segments—ML covering 322.368 hectares and NMZ covering 506.742 hectares. These mines are among the oldest and most productive in NMDC’s portfolio, contributing significantly to the company’s total annual iron ore output.
The notice from the district administration highlights concerns regarding the adherence to environmental guidelines and proper mining practices. This move marks one of the largest penalties imposed on a public sector company in Chhattisgarh and underscores the state government’s focus on enforcing strict compliance in mining operations.
NMDC’s operations in Chhattisgarh are critical to India’s steel industry, with the Kirandul and Bacheli complexes producing a substantial portion of the country’s high-grade iron ore. The company’s total iron ore production from these complexes is estimated to be around 25-30 million tonnes annually, contributing significantly to its overall production of approximately 42 million tonnes in the fiscal year 2023-24.
The imposition of this hefty fine comes at a time when the state is increasingly scrutinizing mining activities to ensure that they do not adversely impact the environment and local communities. NMDC, which has been a key player in the region’s economic development, will now have to address these allegations and ensure compliance with the regulatory framework.
The company has yet to officially respond to the penalty, but industry experts believe that this development could lead to a thorough review of NMDC’s mining operations in Chhattisgarh. The fine is expected to have significant financial implications
Office of Collector Dantewada vide its letter dated 29.08.2024, has proposed to levy penalty and compensation to the tune of Rs. 1620.5 crore for the alleged transport of iron ore without Railway Transit Pass (RTP) and thereby alleging contravention of the various provisions of different mining laws.
It is respectfully submitted that the levy of compensation and penalty by way of impugned notice for demand of penalty and compensation solely and blindly without considering the facts and circumstances in the present case is completely inappropriate.
It is specifically stated that any transport quantity violation as alleged by the District Authority, Dantewada in the show cause notice should be co-related with the following facts –
1) That, NMDC Limited has been operating with valid Mining Lease, Approved Mining Plan, CTO, CTE, Environment Clearances & Forest Clearances from Ministry of Environment Forest and Climate Change(MoEFCC), Government of India.
2) As per Rule 2, Sub rule 1 (d) of Chhattisgarh Mineral (Mining, Transportation and Storage) Rule, 2009, Deposit wise, Grade wise, and Product wise Advance Royalty is being paid by Kirandul Complex, NMDC Ltd. through khanij-online portal to State Govt. of Chhattisgarh and after payment of advance royalty, the
e-permit numbers are being generated.
3) Since NMDC is making advance Royalty Payment as per mentioned Point No. 2 above, BIOM Kirandul Complex has not carried out any violation of Chhattisgarh Minerals (Mining, Transportation and Storage) Rules 2009 for the alleged transport of iron ore without Railway Transit Pass (RTP).
4) State Government verifies these records every six months at the time of royalty assessment and not a single objection has been raised so far by the state government, which shows that there has been no violation by BIOM Kirandul Complex.
5) Technically, the finalization of Iron Ore grade takes time, which causes delay in the generation of Railway Transit Pass (RTP) by 2-3 days. However, this doesn’t make any loss to state exchequer.
6) NMDC is submitting suitable reply to District Collector, Dantewada in this regard.
