Miner NMDC challenges Karnataka's demand for higher iron ore revenue

By Nidhi Verma and Neha Dasgupta

NEW DELHI (Reuters) - India's biggest iron ore miner NMDC Ltd on Monday sued Karnataka to block demands for a bigger share of revenue from the sale of iron ore from a local mine, said a senior state-level official.

Rajender Kataria, the state's mining secretary, told Reuters on Monday a court will hear the matter on Jan. 10.

Karnataka plans to auction the Donimalai iron ore mine as NMDC, majority owned by the Indian government, refused to pay an additional levy on ore sales from the mine, he said.

NMDC, which has suspended its operations at the site due to the dispute, did not respond to an email seeking comment.

Karnataka levied the additional fee when it renewed NMDC's license for the Donimalai mine last month, and the state-owned miner contested it, according to a company letter reviewed by Reuters.

Following the miner's objection, the state government had threatened to cancel its lease. The mine primarily supplies ore to India's biggest domestic steelmaker JSW Steel Ltd.

"NMDC has approached the high Court for an urgent hearing," Kataria told Reuters. Karnataka state was mulling auctioning the mine next month, he said.

"We had sent a letter and a reminder last month to NMDC saying if they did not agree to our terms, our recourse will be to auction the mine in January," he said.

Until the court hearing, however, the state government will not be able to make a formal decision, he said.

(Reporting by Neha Dasgupta and Nidhi Verma; Editing by Sanjeev Miglani and Tom Hogue)