Iron ore dispatches disrupted in key NMDC mines after state govt order

The Chhattisgarh government had issued show-cause notice to NMDC on June 11 for setting its loading plant outside mining area in violation of lease terms

The dispatch of Iron-ore from the major facilities of National Mineral development Corporation (NMDC) in Chhattisgarh had come to a halt following a state government order.

The Chhattisgarh government had issued show-cause notice to NMDC on June 11 for violation of lease conditions. The issue pertains to NMDC allegedly setting its loading plant outside the mining area that violated the norms.

The company had denied it, stating that the mineral storing area falls within its mining complex. Following the development, operation in its Bailadila project in Chhattisgarh was severely disrupted.

For the NMDC, the Chhattisgarh project that comprises Bacheli and Kirandul complexes is crucial. Of the 32 million tonnes (MT) that the company produced in the last fiscal, 25 MT was shared by the Chhattisgarh projects.

The company officials on Saturday said that the production was resumed after a pause but the despatch of mineral had come to a halt since June 11. Country’s largest iron-ore producer and exporter had been despatching average 12 rakes of mineral per day. During peak demand, it reaches 15-16 rakes.

The state government spokesperson said they had not asked NMDC to stop production. “The state government is willing to ensure that the mineral production goes uninterrupted and it is for the NMDC to follow the rules and rectify the issues pending at their end,” the spokesperson added.    

The state government and the ministry of steel had locked horns last month after Chief Minister Bhupesh Baghel sent a strongly-worded letter to Steel Minister Dharmendra Pradhan on May 4. “I request you (Steel Minister) to issue necessary instructions to NMDC that the pending payments are made at the earliest and NMDC stands by its commitment to Chhattisgarh,” he said in the correspondence.

The state government wanted NMDC to cough up Rs 1623 crore as part of “common clause judgement'” while the company reportedly paid just Rs 600 crore besides getting its mines lease extended till September 11, 2035. The company had also failed to award contract to Chhattisgarh Housing Board for building township in Nagarnar where NMDC is setting up 3 MTPA steel plant.