You are here: Home » Companies » News
Business Standard

Govt extends NMDC's Donimalai iron ore lease after two-year suspension

Centre signs agreement with Karnataka govt and Ministry of Steel in this respect

NMDC | Modi govt | Iron Ore

T E Narasimhan  |  Chennai 

iron ore mine
Restarting the mine would contribute a total of about Rs 1,100 crore to the State exchequer a year.

The Government of India has signed an agreement with the Government of Karnataka and the Ministry of Steel to extend Donimalai lease. has been operating the mine, but operations were suspended since November 2018.

The mine is extended for 20 years with effect from November 2018.

Exercising the power conferred to GOI under section 31 of the MMDR Act, 1957, the Government of India reached at an agreement with Government of Karnataka and Ministry of Steel to extend Donimalai lease, said

The company further said that the decision has not only paved way for operationalisation of the mine but is also a timely decision taken in a situation when the steel are facing a shortage of supply of

Donimalai iron ore mine, which has a total concession area of 597.54 hectares and estimated resources of 149 million tonnes, will increase the annual iron ore production in the country by seven million tonnes per annum. Based on the existing high price of ore, it is expected that Donimalai Iron ore mine will contribute around Rs 400 crore to the state exchequer during the ongoing financial year.

Restarting the mine would contribute a total of about Rs 1,100 crore to the State exchequer a year. It will also take the nation a step closer to the Government's mission of achieving 300 MTPA crude steel capacity by 2030-31.

NMDC's Donimalai in Karnataka has remained non-operational since 2018 after and the Karnataka Government got into legal battle over the asset.

The then Congress-JDS-led state government in 2018 decided to levy a premium equivalent to 80 per cent on the iron ore extracted from mine, as a pre-condition to extending the lease. NMDC did not agree and stopped mining operations in November 2018. The company also moved Court against the decision, and obtained a favourable order. While the public sector miner was planning to start operations, the BJP-led Government also decided to cancel the lease.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, December 04 2020. 16:57 IST