Mumbai, July 4: Tata Steel on Friday said that it has received a demand notice of Rs 1,902.72 crore from the Deputy Director of Mines in Jajpur, Odisha.

The notice relates to an alleged shortfall in the dispatch of minerals from the company’s Sukinda Chromite Block.

According to a stock exchange filing by Tata Steel, the demand is based on a revised calculation of average sale prices provided by the Indian Bureau of Mines.

The mining authorities issued the notice on July 3 under Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016. They have also moved to use the company’s performance security amount to recover the dues.

“On July 3, Tata Steel Limited has received a demand letter issued by the Office of Deputy Director of Mines, Jajpur, in connection with revised assessment of shortfall in dispatch of minerals from the Company’s Sukinda Chromite Block, for the fourth year in terms of Mine Development and Production Agreement (i.e., July 23, 2023 through July 22, 2024) in alleged violation of Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016, and consequent appropriation of performance security,” the company said in its filing.

“The revision in assessment is based on declaration of average sale price notified by the Indian Bureau of Mines,” the company added in its filing.

The shortfall in mineral dispatch is said to have taken place during the fourth year of Tata Steel’s mining agreement -- from July 23, 2023, to July 22, 2024 -- under the Mine Development and Production Agreement (MDPA) for the Sukinda block.

Tata Steel has disagreed with the demand. The company said the claim has no justification or proper basis, and it plans to challenge the notice through legal channels.

“The Management believes that the State's demands lack justification and substantive basis,” the firm stated.

“Accordingly, the company will pursue suitable legal remedies before the appropriate judicial or quasi-judicial forum(s),” the company added.

Sukinda, located in Odisha’s Jajpur district, is one of the largest chromite reserves in the country and plays a key role in Tata Steel’s raw material supply. (IANS)

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