Chhattisgarh slaps Rs 1620.49 crore penalty on public sector NMDC

RAIPUR: In a major development, Chhattisgarh’s Dantewada district administration has imposed a penalty of over Rs 1620.49 crores on the public sector National Mineral Development Corporation (NMDC), which has its iron ore mining operations at Kirandul in the Bastar region, for allegedly violating mining lease conditions.
Dantewada Collector Mayank Chaturvedi has issued a notice to NMDC Kirandul, imposing a fine of Rs 1620.49 crore and directing them to deposit the amount within 15 days.
The order stated that the iron ore mining leases approved for Deposit No. 11, covering an area of 874.924 hectares, and Deposit No. 14 ML, covering 322.368 hectares, and Deposit No. 14 NMZ, covering 506.742 hectares in Kirandul village, Bacheli Tehsil, South Bastar Dantewada District. Earlier, the district administration issued notices to the NMDC and found that their replies were unsatisfactory.
The notice mentioned that the NMDC has violated Section (4)(1) of the Chhattisgarh Mineral (Mining Transportation and Storage) Rules, 2009.
The National Mineral Development Corporation (NMDC) plays a pivotal role in India's iron ore production, with its operations in Chhattisgarh's Bastar region being a significant contributor. The company's iron ore mines in the area are among the largest in the country, and they have been instrumental in supporting both domestic steel production and export.
Responding to the order, an NMDC spokesman stated, "The notice issued by the Office of the Collector in Dantewada, proposing a penalty and compensation of Rs. 1,620.5 crore, is both surprising and unfounded. The allegations regarding the transport of iron ore without a Railway Transit Pass (RTP) fail to consider the full scope of NMDC's compliance with all relevant mining laws and regulations.
"NMDC has been operating with all necessary approvals, including a valid Mining Lease, an Approved Mining Plan, and clearances from the Ministry of Environment, Forest, and Climate Change (MoEFCC), as well as state-level consents. We have consistently adhered to the Chhattisgarh Mineral (Mining, Transportation, and Storage) Rules, 2009, by making advance royalty payments based on detailed deposit-wise, grade-wise, and product-wise calculations through the state's khanij-online portal. These payments are made before the generation of e-permits, which are a prerequisite for transporting iron ore.
"It is important to note that the State Government reviews these records every six months during royalty assessments, and to date, no objections have been raised regarding our operations. This clearly indicates that NMDC has not violated any rules or regulations, as alleged in the show-cause notice.
"Moreover, while there may be a slight delay of 2-3 days in generating the RTP due to the technical time required to finalize iron ore grades, this does not result in any loss to the state exchequer. The imposition of such a significant penalty without considering these crucial factors is inappropriate and unjust.
"We are in the process of preparing a comprehensive response to the notice, which will be submitted to the District Collector, Dantewada. NMDC is confident that once all the facts and circumstances are thoroughly examined, it will be evident that the company has acted within the bounds of the law, and the proposed penalties will be reconsidered and revoked."
NMDC operates three key iron ore complexes in Chhattisgarh’s Bastar region, located at Kirandul and Bacheli in the Dantewada district. The iron ore mined from these locations is known for its high quality, making it a critical resource for steel manufacturers.
The Kirandul Complex includes Deposit No. 11, covering an area of 874.924 hectares, and Deposit No. 14, with two segments—ML covering 322.368 hectares and NMZ covering 506.742 hectares. These deposits are among NMDC's oldest and most productive mines.
The Bastar region contributes a major portion of NMDC’s total iron ore production, which stood at approximately 42 million tonnes during the fiscal year 2023-24. The Kirandul and Bacheli complexes collectively produce around 25-30 million tonnes of iron ore annually.