The renewal of the Donimalai mining lease is still on hold and NMDC has not received any communication from the Karnataka government on the non-applicability of recent amendments on the extension of mining leases.
The Karnataka government agreed to extend the lease on the condition that NMDC should pay a premium of 80 percent on the sale value of the mineral, as determined by the Indian Bureau of Mines, which the company did not agree with. The state-owned company who had been lease holder for the Donimalai iron ore mines since 1968, stopped its operations in November 2018.
NMDC challenged the premium demand in the Karnataka High Court through a writ petition. In July, the High Court set aside the condition for premium. Subsequently, in August, the Karnataka government withdrew the approval for the extension of the lease and decided to auction the iron ore mine as per the Mines and Mineral Regulation (Development) Act.
NMDC moved the Revisionary Authority in the Union Ministry of Mines, which agreed to hear the case if the Karnataka government withdraws the plan to auction the mine and stayed further proceedings in the case.
Finally, the Centre on September 27, amended Mineral Rules, 2015 which replaced the words “may” with “shall, making it effectively imperative for the state government to renew the mining lease of a government company. This paves way for the extension of the lease for 7MT Donimalai iron ore mine without any additional cost.
However, even after 3months after the Central government amended the Mining and Mineral Development Act making it mandatory for state governments to renew public sector mining leases, NMDC is yet to receive any communications from the Karnataka government whereas the Chattisgarh government has already renewed lease for 39 MT iron ore mines at Bailadela under the same rules.
