NMDC-CMDC, a joint venture of the National Mineral Development Corporation (NMDC) and the Chhattisgarh Mineral Development Corporation (CMDC), has canceled its iron ore mining contract with Adani Enterprises (AEL). In its letter to Adani Enterprises, NMDC-CMDC cited 'monopoly in operations, shifting responsibilities, and providing mischievous information' as reasons for the termination of the contract.
The contract, which was signed on December 6, 2018, pertains to the allocation of south Chhattisgarh’s Bailadila iron ore Deposit-13 at Kirandul in Dantewada to Adani Enterprises.
According to the letter issued by the CEO of NMDC-CMDC on August 28, 2023, Adani Enterprises had not taken essential steps toward achieving the targeted goals and objectives specified in the agreement.
Adani Enterprises' Fault?
When Adani Enterprises began operations at the Bailadila iron ore mine, it allegedly led to the illegal felling of trees, sparking public outcry. Indigenous tribes launched a strong protest on June 19, claiming it was an attack on their faith and their deity, Nandraj Dev. They argued that the Bailadila hills, where iron ore mine Deposit-13 was located, are the home of Nandraj Dev.
The local administration refrained from interfering to prevent further escalation of social anger.
After evaluating various terms and conditions of the agreement and the progress made by Adani Enterprises, a competent authority at NMDC-CMDC Ltd made adverse remarks against AEL and served it a show-cause notice regarding termination. The authority stated that it found the company's responses 'unsatisfactory' and lacking the ability to instill confidence, as Adani Enterprises remained 'silent on its responsibilities.'
In response to the show-cause notice, Adani Enterprises reportedly shifted the responsibility to NMDC-CMDC, an argument that the authority deemed a 'lame proposition not worthy of acceptance.'
In the termination order, the Chief Executive Officer of NMDC-CMDC stated, 'To claim that the failure lies with the NCL is not only inaccurate but also mischievous. Continuing with a non-starter serves no purpose. The iron ore mining service agreement dated December 6, 2018, stands canceled.'
Another setback for Adani Group
This cancellation adds to a series of setbacks for the beleaguered Adani Group, which has faced increased scrutiny for alleged governance lapses from international investors such as Hindenburg Research and, as recently as August, The Organized Crime and Corruption Reporting Project (OCCRP), as well as India's opposition parties.
Adani Group's Raipur and Delhi offices did not respond to our request for comment on this cancellation.
