In August 2017, the Indian Supreme court held that a violation of environmental laws also amounted to illegal mining, and the Indian government must be compensated for these excesses even if they had been condoned.
This Section 21 (5) of MMDR Act ruling is affecting present operations and total iron ore availability. By the end of the year, the state government had raised demand notices on 131 miners amounting to Rs 175.76 billion ($2.7 billion). Of this, the government collected Rs 101.8 billion ($1.6 billion) by the court-set deadline of December 31, 2017. By January, 44 mining companies had yet to pay their share of compensation.
Leases of the 44 mines, including those of Aditya Birla Group's Essel Mining, Mideast Steel and Serajuddin, now face cancellation. Senior legal experts involved in the case say leases could be revoked after a show of cause notice granting them 60 more days, and if the dues are still not paid certificate cases can be filed against the defaulters.
The amounts owed were a percentage of the value of all iron ore they had mined between 2000-2010 in excess of their environmental permits or without a forest permit. Seven operating mines, together amounting to 20 million mt of iron ore production, had not been able to meet this deadline, sending domestic steelmakers into panic about shortage of iron ore.
On January 30, the Supreme court directed Odisha to take "coercive action" against miners who failed to comply with the court's orders to reimburse the state for violating environmental laws while extracting iron ore between 2000-2010. The court has also denied payment extensions and installment agreements. The government of Odisha has also been asked to collect a 12 percent interest on late payments.