Vedanta Subsidiary ESL Steel Hit with ₹1,255 Crore Demand from Odisha Mines Department

ESL Steel Limited, a wholly-owned subsidiary of Vedanta Limited, received two demand notices dated January 16, 2026 from the Deputy Director of Mines, Koira Circle, Odisha's Steel & Mines Department on January 17 at 4:30 PM IST. The notices demand a whopping ₹1,255.38 crore for alleged shortfall in meeting minimum production and dispatch targets at its BICO and Feegrade Mines.

The demands relate to violations of Sub-Rule 1 of Rule 12(A) of the Minerals Concession Rules, 2016 for the fourth year of operation under the Mine Development & Production Agreement signed on November 15, 2021. Odisha authorities claim ESL failed to meet mandatory MDPA targets, triggering massive financial penalties.

ESL Steel is evaluating the notices and their calculations, maintaining that the demands are not sustainable on merits. The company plans to pursue legal remedies including seeking a stay on the notices and ultimately getting the demands quashed through appropriate legal channels.

The BICO and Feegrade Mines in Odisha are critical iron ore assets for ESL Steel's operations and Vedanta Group's raw material security. Such demand notices for production shortfalls are common in India's mining sector where companies frequently challenge penalties citing various operational and market factors.

ESL Steel confirmed it received the notices and is conducting a detailed review. No immediate financial provisioning or operational disruptions have been announced pending the legal outcome. Vedanta Group stated it will take all necessary legal steps to protect its interests.

The ₹1,255 crore demand represents a significant financial claim that could impact ESL's quarterly financials if upheld, though the company appears confident in its legal position.

Shares of Vedanta Limited was last trading in BSE at Rs. 682.95 as compared to the previous close of Rs. 675.70. The total number of shares traded during the day was 1152737 in over 22490 trades.

The stock hit an intraday high of Rs. 686.20 and intraday low of 664.30. The net turnover during the day was Rs. 781063900.00.

Source : Equity Bulls

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Vedanta INE205A01025 VEDL Aluminium ESLSteel DemandNotice OdishaMinesDepartment