Chattisgarh govt assures NMDC of renewing mining leases for 20 years

The Chhattisgarh government has assured state-run National Mineral Development Corporation (NMDC) of renewing mining leases in Dantewada district for another 20 years.

The development assumes significance as NMDC is the country's largest iron ore miner and unlike in Karnataka the company's operations will not be affected in Chhattisgarh and the company will be able to supply raw material to steel makers.

NMDC had suspended iron ore-mining from its Donimalai mine in Karnataka following the decision of the State government to impose 80 per cent premium on the iron ore sales from the mine.

"We are grateful to the Chhattisgarh Chief Minister Bhupesh Baghel and top officials for their support to the NMDC and granting extension of lease for another 20 years," NMDC Chairman-cum-Managing Director (CMD) N Baijendra Kumar said.

According to the Mines and Minerals (Development and Regulation) Act, expiring licences of mines will not be renewed and the mines will be allotted on the basis of fresh auction.

However, a company official explained that "earlier as per the act the state may renew the lease of a mine if approached by public merchant miner. This meant that a state government can or can not extend the lease. But learning with what happened in Karnataka with NMDC, central government in September 2019, made an amendment to the law and replaced a the word "may" with "shall". Now it means state 'shall' renew the lease of a mine if approached by public merchant miner."

The public sector mining major, 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 contributing 70 per cent to the 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 about 24 MTPA (in 2018-19).

The Donimalai mine, with a capacity of 7 MTPA, where mining operations have been suspended for want of renewal which is still pending with Government of Karnataka.