In a significant legal development for Odisha’s mining-led economy, the Orissa High Court has directed the state government to file a comprehensive affidavit by January 8, 2025, regarding allegations of chronic under-utilization of iron ore mining capacity.
The Public Interest Litigation (PIL), filed by a Bhubaneswar-based NGO, claims that despite Odisha holding approximately 28% of India’s iron ore reserves, the state’s production remains far below its authorized potential. This “striking imbalance” between approved environmental clearance (EC) limits and actual production has triggered concerns about massive revenue leakages and regional economic stagnation.
Economic Impact and Revenue Significance
The mining sector is the undisputed backbone of Odisha’s fiscal health. Factually, the industry is the single largest contributor to the state’s Own Non-Tax Revenue (ONTR), which accounts for nearly half of the state’s total internal revenue.
Tax & Revenue Contribution: In FY 2023-24, Odisha recorded the highest share of non-tax revenue in India at 49%, with mining royalties acting as the primary driver. According to the state’s fiscal strategy reports, mining-related receipts (including royalties, DMF, and NMET) are expected to contribute over ₹47,000 crore in the 2024-25 fiscal year.
The Under-utilization Claim: The petition highlights that while the 63 operational iron ore leases in the state have a combined EC capacity of 246 MTPA (Million Tonnes Per Annum), the actual production in 2024-25 was only 159 MTPA. This represents a utilization rate of just 64%.
The legal challenge emphasizes that the idling of high-capacity mines, such as the Balda and Jururi blocks, has severely impacted livelihoods in the mineral-rich districts of Keonjhar, Sundargarh, and Jajpur. The “under-production” has not only stalled infrastructure development funded by the DMF but also led to a decline in employment opportunities within the logistics and mineral-processing sectors.
The performance of mining blocks in Odisha highlights a staggering gap between approved potential and ground reality. The Balda block, which previously demonstrated its capability by producing over 10 MTPA prior to 2020-21, has alarmingly managed to utilize only 6% of its 15 MTPA capacity over the last four years. Experts suggest that if the site achieved an optimal production level of 40–45 MTPA, the state could have generated upwards of ₹3,000 crore in additional royalties and taxes, while simultaneously creating sustainable employment for north of 4,000 people in the region. Similarly, the Jururi block has languished, utilizing less than 5% of its approved capacity.
As the High Court examines whether the state is fulfilling its “statutory duties in regulating mining operations,” the upcoming January 8 affidavit will be crucial in determining if the government can bridge the gap between geological potential and actual economic output.
