India: ArcelorMittal India makes payment to Odisha govt on MDPA shortfall

ArcelorMittal India Pvt. Ltd. (AMIL) has made a payment of INR 35,29,92716 to the Odisha government in response to the 'Revised Demand Notice' issued by the state government subsequent to the steelmaker failing to meet its MDPA target.

A demand notice of INR 145 crore had initially been issued to ArcelorMittal for falling short of its production target at the Thakurani mine that it had acquired in Odisha last year.

AMIL had bagged the rights to the Thakurani iron ore block in Joda by quoting a premium of 107.55%.

The Odisha government had issued demand notices under Sub Rule-I of 12(A) of (Other than Atomic and Hydrocarbon Energy Mineral) concession Rules, 2016 to all those who had failed to meet MDPA targets.

'Differential applicable amount'

AMIL informed the state government that the company had deposited the above-mentioned amount as "differential applicable amount", adding that if the demand on the shortfall target is "calculated accurately" the sum would be INR 35,29,92716 - all the while "assuming without admitting that there is a requirement to maintain a minimum level of dispatch of the ore produced," the letter by AMIL, a copy of which is with SteelMint, states.

Shortfall calculation

Reiterating that the money deposit to the state government has been made strictly "under protest", AMIL stated that shortfall in dispatches have to be calculated on the "basis of ASP for 12 months only commencing from the effective date for the mining lease of Thakurani..."

Irrespective of current court proceedings on MDPA shortfall issues between miners and the state government, AMIL has electronically transferred the said amount to the Odisha government.

Meanwhile, AMIL stated that shortfall in dispatches concerned volumes that had never been dispatched from the mine, and therefore didn't figure into the calculation for determining royalty, DMF, NMET and other statutory levies.