Distress in Karnataka, NMDC gets 'mining lease' breather in Chhattisgarh

State-run National Mineral Development Corporation (NMDC) Limited heaved a sigh of relief as the Chhattisgarh government decided to renew the lease of four mines that were at stake following development in Karnataka.

The public sector mining behemoth, which has been in the business of mining iron ore for over six decades, operates three iron-ore complexes in the country. While one is located in Karnataka’s Donimalai, two are in Dantewada district of Chhattisgarh — sharing major proportion of company’s total output. 

Of the NMDC’s 33-million tonnes per annum (MTPA) production, Chhattisgarh’s two complexes in Bacheli and Kirandul under Bailadila project contribute 23.2 MTPA (in 2018-19). The Donimalai mine, with a capacity of 7 MTPA, was mired in controversy over renewal resulting in the cancellation of lease last year, which subsequently suspended the production. The company could not get the lease as of now despite intervention of Centre and mines tribunal.

Wary of Karnataka development, NMDC started the exercise to avoid any unfavourable precedence to be set that could jeopardise its lease renewals in other states especially Chhattisgarh. Of the fives mines under the Bailadila project, lease of four with an installed capacity of over 29 MTPA are expiring in March 2020. 

NMDC Chairman-cum-Managing Director N Baijendra Kumar took the command and the exercise that continued for the last six months finally yielded the desired results. “We are grateful to Chhattisgarh Chief Minister Bhupesh Baghel and top officials for their support to the NMDC and granting extension of lease (for the four mines) for another 20 years,” Kumar told Business Standard. 

What helped the NMDC in breaking the deadlock in Chhattisgarh was Kumar’s bureaucratic background. An IAS official of 1986-batch, he belonged to the Chhattisgarh cadre and was familiar with the working that helped in convincing the state authorities. Kumar is the first IAS official to head NMDC Limited.

A dilly-dally in Chhattisgarh over lease renewal would have been critical to keep NMDC alive.