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After state govt's levy, NMDC suspends iron ore-mining in Karnataka

NMDC would be losing Rs 1,348 per tonne and may result in a loss of Rs 9.44 billion per annum as it mines about seven million tonnes of iron ore per annum from Donimalai

Press Trust of India  |  Hyderabad 

Representative Image
Representative Image

has suspended from its in following the decision of the to impose 80 per cent premium on the sales from the mine, according to a regulatory filing by the public sector undertaking.

The company said it has requested the government to reconsider its decision and the had convened a meeting with senior officials on November 14.

"In response to our representation, the had convened the urgent high-level meeting on November 14 in Bengaluru and directed all the concerned to re-look into the representation given by us regarding the legal and other issues raised," the company said.

The meeting ended on a positive note and there was information that the cabinet has not taken any decision to cancel the lease of Donimalai to NMDC, it said.

Pending the decision on representation by the Karnataka government, production has been temporarily suspended, the NMDC said.

Sources said if the decided to stick to the 80 per cent premium, NMDC would be losing Rs 1,348 per tonne and may result in a loss of Rs 9.44 billion per annum as it mines about seven million tonnes of per annum from Donimalai.

The lease of has already been extended by the with effect from November 4 for 20 years, NMDC said.

The Karnataka cabinet has approved the lease of Donimalai till November 2038, on payment of 80 per cent of the average sale value as published by Indian Bureau of Mines, the NMDC said.

"Since imposition of such conditions is not according to the MMDR (Amendment) Act, 2015 read with Mineral (Mining by Government Companies) Rules, 2015 and as it is also not economically viable, we have raised the issue with the Karnataka Chief Minister," the NMDC said.

First Published: Tue, November 20 2018. 16:30 IST
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