Tata Steel has received a Rs. 1902 crores demand notice from Odisha’s mining department over alleged shortfall in mineral dispatch from its Sukinda Chromite Block. The company has termed the notice baseless and plans legal action. The issue may impact Tata Steel’s stock performance.
Tata Steel, one of India’s leading steelmakers, has received a demand notice of Rs. 1902.72 crore from the Odisha government. The notice, issued by the Deputy Director of Mines, Jajpur, Odisha, on 3rd July 2025, relates to an alleged shortfall in mineral dispatch from the company’s Sukinda Chromite Block during the fourth year of its Mine Development and Production Agreement (MDPA). This development could have a direct impact on Tata Steel’s stock performance and has already caused a slight dip in its share price in the today’s (04th July 2025) trading session.
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Why the Notice Was Issued
According to the Odisha government, Tata Steel failed to dispatch the required amount of minerals between 23 July 2023 and 22 July 2024 as per the terms of its MDPA for the Sukinda block. The state claims this shortfall violates Rule 12A of the Mineral (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016, and has therefore raised a demand of Rs. 1902.72 crore, which also includes the forfeiture of performance security. The demand amount was calculated using the revised average sale price of minerals, as notified by the Indian Bureau of Mines (IBM).
Tata Steel’s Response
Tata Steel has strongly disagreed with the demand and has stated that it finds no valid justification or legal basis for the claims made in the notice. In a filing to the stock exchanges, the company said it intends to challenge the notice at the appropriate legal forum. The company clarified that the notice relates specifically to mineral dispatch shortfall from its Sukinda block during the MDPA’s fourth year and that the valuation was done using IBM’s average sale price, leading to the high demand figure. Tata Steel management believes the state’s demand lacks merit and is committed to defending its position through legal channels.
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Impact on Investors and Market Reaction
This demand notice has triggered concern among investors. On Friday, 4th July 2025, Tata Steel’s share closed at Rs. 163.10, down by about 1.7%. While the stock has shown strong performance in recent months, up 18% in the last six months and 7% in two weeks, this notice could lead to further volatility when the markets reopen on Monday. The company’s current market capitalization stands around Rs. 2 lakh crore, making this notice significant in terms of financial and investor sentiment.
About the Sukinda Chromite Block
Located in Odisha’s Jajpur district, Sukinda is one of India’s largest chromite reserves, playing a crucial role in Tata Steel’s raw material supply chain. Any disruption or regulatory issue at this site can affect the company’s operations and long-term planning.
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