Ministry of Mines puts a Stay to State Govt Order on NMDC Donimalai Lease Cancellation

Govt of Karnataka, decided to cancel the lease renewal order of NMDC's Donimalai mines in Karnataka in an order dated 17 Aug '19 and further put for an auction sale of the expired mine lease block.

Following this, NMDC had requested the Government of Karnataka to withdraw its letter stating withdrawal of NMDC Donimalai lease renewal and requested for urgent hearing on the matter by filing revision application.

The hearing was fixed today (21 Aug'19) with due communication to state govt & NMDC. As per reports, nobody from State govt attended the meeting but a letter was received stating that since they could not receive copy of revision application so they could not prepare comments and hence should be given one weeks time to prepare statement of objections.

So the authority (Central govt mines tribunal) has put a stay to the order dated 17 Aug until the next date of hearing.

Iron ore operations are on hold at NMDC’s Donimalai mine, which was renewed lease on 3rd Nov’18 for the next 20 years. But the State Govt. put the additional condition to pay 80% premium on iron ore sale value from Donimalai to the Karnataka State Govt. NMDC was in negotiation with the Govt of Karnataka over its decision to impose an 80% premium on iron ore sales from Donimalai. As the company’s earlier license did not include the premium.

NMDC Donimalai has EC limit of 7 MnT p.a. and produces around 6-6.5 MnT iron ore annually.