Tata Steel Gets ₹1,902 Cr Demand Notice Over Sukinda Dispatch Shortfall

Mumbai: Tata Steel Ltd. has received a demand notice of ₹1,902.72 crore from the Deputy Director of Mines, Jajpur, Odisha, over an alleged shortfall in mineral dispatch from its Sukinda Chromite Block, the company informed in a stock exchange filing on Friday.

The notice, issued on July 3 under Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016, pertains to the fourth year of the company’s Mine Development and Production Agreement (MDPA), covering the period from July 23, 2023 to July 22, 2024.

The demand is based on a revised assessment using the average sale price of minerals as notified by the Indian Bureau of Mines. Authorities have also moved to appropriate the company’s performance security amount to recover the alleged dues.

In its filing, Tata Steel stated“On July 3, Tata Steel Limited received a demand letter issued by the Office of the Deputy Director of Mines, Jajpur, in connection with revised assessment of shortfall in dispatch of minerals from the Company’s Sukinda Chromite Block, in alleged violation of Rule 12A.”

However, Tata Steel has strongly contested the demand, stating that the claims made by the state government lack justification and substantive legal basis. The company has announced its intention to challenge the notice through appropriate judicial or quasi-judicial forums.

“The Management believes that the State’s demands lack justification and substantive basis. Accordingly, the company will pursue suitable legal remedies,” the filing noted.

The Sukinda Chromite Block, located in Odisha’s Jajpur district, is one of India’s largest chromite reserves and is crucial to Tata Steel’s raw material supply chain. The dispute adds a significant regulatory challenge for the company amid its broader operations in the mineral-rich region.