Govt of Karnataka Withdraws NMDC Donimalai Lease Renewal Order; Plans to Put for Auction

As per the recent order issued by govt of Karnataka, the state govt has decided to cancel the lease renewal order of NMDC's Donimalai mines in Karnataka.

The order also states that in the further course of action, in this regard bid documents to be prepared for auction process and necessary technical committee constituted shall be placed before the state Empowered Committee for obtaining post-facto approval of the govt. to conduct an auction sale of the expired mine lease block which was held previously by NMDC.

Earlier on 10th Jul, SteelMint reported that Karnataka High Court announced its final judgment in the pending Donimalai case. The judgment was in favor of NMDC thus need not pay premium for mining lease renewal at its Donimalai mines.

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.