Mumbai | Aug 06, 2015: Tata Steel Ltd on Thursday said dispatch of iron ore from its Noamundi mine to its Jamshedpur steel plant has been stalled as the Jharkhand government has stopped issuing the required challans.

In its statement to BSE on Thursday, the company further said, “… the Jharkhand government has not allowed the execution of supplementary lease deed for extension of the Noamundi iron ore mine in spite of several representations to the state.”

Tata Steel said the company’s refusal to accept a different interpretation of the requirements to extend the lease deed was why the Jharkhand government had stopped challans. “Applying its own interpretation of the legislative and judicial pronouncements, Jharkhand government has stipulated certain onerous terms and conditions for allowing extension of the mining lease, which are not in conformity with the Mines and Minerals Development Regulatory Act,” the company said. The Act stipulates extension up to 31 March 2030.

Tata Steel has decided to seek legal recourse to solve the issue, the company said in a statement. The issue “will financially impact the company till the matter is resolved, however, the company has taken all measures to ensure operations at Jamshedpur plant are unaffected”, the company added.

Tata Steel’s Noamundi mine produces 10 million tonnes of iron ore per year and supplies to the company’s 9.7 million tonnes Jamshedpur steel plant. Operations at the mine were restarted in January, after a shutdown in September last year, owing to issues over renewal of mining leases. Tata Steel was forced to import iron ore for the first time then, to make up for the shutdown of mines.

At 12.46pm, Tata Steel was trading at Rs.263.15 on BSE, up 0.3% from its previous close, while India’s benchmark Sensex index fell 0.1% to 28,194.40 points.

(Source: http://www.livemint.com/)