Karnataka govt defers auction of Donimalai iron ore mine

The Karnataka government has deferred the auction of the Donimalai iron ore mine.

The development comes soon after the Centre's Mines Tribunal kept in abeyance the cancellation of mining lease of the block by the state government extended to NMDC Ltd.

"The government of Karnataka has identified one iron ore mine for electronic auction for grant of mining lease and accordingly NIT (Notice Inviting Tender) was issued dated August 20, 2019, on MSTC website for Donimalai Mine (earlier held by NMDC) ML no 2396," according to a notice by the state government.

"The schedule of the auction process for the said mine is hereby deferred until further notice," it added.

The state had earlier withdrawn the extension of the mining lease granted to NMDC for the mine in November 2018 for a 20-year period. Challenging the decision, the public sector undertaking moved the Tribunal, which heard the petition on August 21 and stayed the order. "The said Stay Order would prohibit the Government of Karnataka to take any further action regarding mining lease or initiate auction process of Donimalai mine," NMDC recently said in a statement.

Earlier, the firm was in a legal battle with the state government over the issue of imposition of 80 per cent premium on the sale price of the iron ore extracted from the Donimalai mines.

However, the High Court of Karnataka last month set aside the governments move.