Stay on cancellation of NMDC mine lease

NMDC filed a ‘Revision Application’ with the Ministry of Mines, seeking an urgent hearing of the matter. 

Published: 23rd August 2019 08:46 AM  |   Last Updated: 23rd August 2019 08:46 AM   |  A+A-

Iron Ore

For representational purposes

By Express News Service

HYDERABAD: In a relief to state-run iron ore miner NMDC, the Ministry of Mines put an interim stay on Karnataka government’s decision to cancel the lease given to the former’s Donimalai iron ore mine until next hearing. 

NMDC leased the mine in 1968 for 50 years; the lease expired on November 3, 2018 and the mine has been shut since then. 

On November 2, 2018, the state government issued a letter extending the lease for 20 years, but insisted that NMDC pays a premium of 80 per cent of the iron ore’s sale value. The state’s argument was that it wasn’t getting proportional benefits and stands to lose Rs 30,000 crore, but NMDC said it will stick to the statutory liability of 15 per cent royalty. 

Subsequently, NMDC moved high court and on July 10 the court ruled in its favour. However, the court also said it’s the state’s  discretion whether to extend the lease or not. On August 17, the state cancelled the lease, putting the mine under auction. 

NMDC on Wednesday filed a ‘Revision Application’ with the Ministry of Mines, seeking an urgent hearing of the matter. The latter put an interim stay until further notice. 

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