Tata Steel receives ₹1,902 crore demand notice over mineral dispatch shortfall in Odisha

Tata Steel has received a demand notice of ₹1,902 crore from the Office of the Deputy Director of Mines, Jajpur, over an alleged shortfall in mineral dispatch from its Sukinda Chromite Block in Odisha.

The notice, dated July 3, points to a violation of Rule 12A of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016. It also cites appropriation of performance security as part of the enforcement action.

As per the official filing made by Tata Steel, the demand pertains to the fourth year under the Mine Development and Production Agreement (MDPA), covering the period from July 23, 2023, to July 22, 2024.

According to the company, the revised assessment is based on the declaration of average sale prices notified by the Indian Bureau of Mines. The alleged shortfall in dispatch has led to an aggregate demand of ₹1,902.72 crore, including the sale value of the shortfall quantity and appropriation of the performance security.

Tata Steel has termed the state’s demand as lacking in justification and substantive basis. The company said it will “pursue suitable legal remedies before the appropriate judicial or quasi-judicial forum(s)” to challenge the notice.

This development comes at a time when Tata Steel is actively pursuing long-term strategic goals. Last month, the company announced its shift towards low carbon-emitting steel-making technologies in both India and Europe. It also aims to achieve 10–15 million tonnes of production via recycling in the next 10–15 years.

As part of its broader vision, Tata Steel plans to scale up its steel-making capacity to 40 million tonnes in India by 2030. Currently, its Indian operations account for over 26 million tonnes of capacity, while another 1.7 million tonnes is located in Thailand.

In FY25, Tata Steel produced 30.92 million tonnes of steel across its global footprint, which includes operations in India, the UK, the Netherlands, and Thailand, against an installed capacity of 35 million tonnes.

Meanwhile, in the UK, Tata Steel is undergoing a major transition at its Port Talbot plant in South Wales. The 3 million tonnes per annum (MTPA) facility is shifting from blast furnace operations to a more sustainable, scrap-based electric arc furnace (EAF) method.

On Friday, shares of Tata Steel closed 1.69% lower on the National Stock Exchange at ₹163.10 apiece.