Mesco’s 8.6 lakh tonnes of iron ore lie unsold eight years after Odisha shut its Roida-I mine

Mideast Integrated Steels Ltd (Mesco) says about 8.6 lakh tonnes of iron ore are still lying unsold at its former Roida-I mine in Keonjhar. Mining there stopped almost eight years ago over a compensation demand from the Odisha government. The company has now asked the Supreme Court to allow the ore to be sold, including to the mine’s new leaseholder, Jindal Steel Ltd.

Mesco disclosed this in the notes to its September-quarter results, published on Saturday. The notes also show that the company has made no provision in its books for either the compensation liability or a Rs 718-crore arbitration award against it.

The dispute goes back to the Supreme Court’s August 2017 judgment in Common Cause v Union of India. The court held that mining leaseholders in Odisha had to pay compensation for ore extracted without environmental and forest clearances. A demand notice for payment of Rs 925 crore by 31 December 2017 was served on Mideast. When it failed to deposit the compensation, its mining operations at Roida-I were stopped from 01 January 2018. The demand covers 2000-01 to 2010-11. Mesco says it had already paid royalty and other statutory dues on that ore. Its curative petition was dismissed, but the company still disputes the liability and the interest on it.

In January 2020, the Supreme Court allowed Mesco to sell 23.51 lakh tonnes of ore that had been mined and stacked before the shutdown. The proceeds were to go to the Odisha Mineral Bearing Areas Development Corporation (OMBADC). The court extended the deadline several times, the last time until July 5, 2023. After that, the state was allowed to take over the unsold stock.

By then, Mesco had sold and dispatched 12.57 lakh tonnes. It handed about 3.34 lakh tonnes to the state-run Odisha Mining Corporation (OMC). According to Mesco, OMC has dispatched only about 2.34 lakh tonnes through e-auctions.

The state later auctioned the Roida-I lease to Jindal Steel and executed a fresh lease deed on July 16, 2025. Mesco wants the remaining ore sold, including to Jindal Steel at the prevailing market price, with the proceeds credited to OMBADC. It is also challenging the state’s decision to send sale proceeds to its revenue account instead of OMBADC. Both of its applications are pending.

The two sides disagree on how much has already been paid. Mesco says it has deposited about Rs 415.80 crore, including GST, towards the compensation. The state recognises only about Rs 301.55 crore as deposited in OMBADC. A further Rs 53.86 crore, including GST, was recovered through OMC up to March 2025. Mesco says all these payments were made under protest.

Recovery has become a sore point in the case. In October 2025, the Supreme Court pulled up the State of Odisha for its failure to recover compensation exceeding ₹2,700 crore from mining leaseholders.

On the arbitration award, Mesco says its appeal has been admitted in the high court and that it is “confident to win”.

The company’s standalone operations remain small. Income was Rs 0.79 crore in the September quarter, and the net loss narrowed to Rs 11.16 crore from Rs 12.75 crore. On a consolidated basis, income nearly doubled to Rs 125.68 crore from Rs 65.68 crore, and the net loss narrowed to Rs 19.36 crore from Rs 57.82 crore. For the half-year, the consolidated net loss was Rs 57.28 crore, which included exceptional items.

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