Odisha Govt to Extract Minerals from Underperforming Mines, Recover Costs from Leaseholders: HC

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Odisha Govt to Extract Minerals from Underperforming Mines, Recover Costs from Leaseholders: HC

The Orissa High Court has directed the Odisha government to step in and extract minerals from mines where leaseholders fail to meet minimum production targets. Mining operations will be carried out through NMDC, with the entire cost recovered from non-performing leaseholders. The order came while hearing a PIL over large-scale underproduction in iron ore mines.

Published by Abhishek Swain | January 30, 2026

Trouble has mounted for mining leaseholders in Odisha who have failed to meet the minimum mineral extraction targets prescribed in their lease agreements. The Orissa High Court has ruled that in such cases, the state government is empowered to carry out mining operations itself and recover the costs from the defaulting leaseholders.

The direction was issued while hearing a Public Interest Litigation (PIL) filed by the Citizens Action Forum. The court observed that under the General Concession Rules, 2016, the government has the authority to act against leaseholders who violate lease conditions by extracting minerals below the stipulated limits.

Invoking Rule 12(1)(EE) of the General Concession Rules, 2016, the court directed that the state government may extract the required quantity of minerals from leased mines through the public sector undertaking NMDC (National Mineral Development Corporation). The expenses incurred during such operations will be recovered from the concerned mining leaseholders.

Odisha accounts for nearly 28 percent of India’s total iron ore reserves. Currently, 63 legally operating iron ore mines in the state have environmental clearance to collectively produce about 246 million tonnes per annum (MTPA). However, during the 2024–25 financial year, only 159 MTPA was produced—around 64 percent of the approved capacity.

The PIL alleged that despite significant underproduction, the government failed to take adequate action against defaulting leaseholders, leading to judicial intervention.