Karnataka’s decision to cancel Donimalai mine lease to NMDC kept in abeyance

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Published: August 23, 2019 7:21:21 AM

NMDC took the matter to the Karnataka High Court, which on July 12, 2019, set aside the condition. However, on August 17, the Karnataka government again withdrew the extension of the mining lease through a letter to the company.

Karnataka, Donimalai, Donimalai mine lease, NMDC, industry news, Karnataka High CourtNMDC then approached the Mines Tribunal, headed by Anil Kumar Nayak, joint secretary, ministry of mines.

The Mines Tribunal has kept in abeyance the Karanataka government’s decision to cancel the Donimalai iron ore mine granted to state-run NMDC until further hearing. The mine was initially given to NMDC in 1968 and the lease expired on November 3, 2018.  The Karnataka government had on November 2, 2018 extended the lease for 20 years, but on November 15, issued a corrigendum asking the company to execute the lease laced with a condition that NMDC would have to pay a premium of 80% of the sale value of the mineral.

NMDC took the matter to the Karnataka High Court, which on July 12, 2019, set aside the condition. However, on August 17, the Karnataka government again withdrew the extension of the mining lease through a letter to the company.

NMDC then approached the Mines Tribunal, headed by Anil Kumar Nayak, joint secretary, ministry of mines. On August 21, 2019, the tribunal prohibited the state to take any further action regarding mining lease or initiate auction process for Donimalai mine.

“Considering the order of the high court, which set aside the condition of levy of premium of 80% for extension of lease and the submissions made by the revisionists, this authority comes to the conclusion that it would meet the ends of justice if the impugned order dated August 17, 2019, and consequent action thereon are kept in abeyance. Accordingly, the impugned order dated August 17, 2019 and any consequent action thereon are stayed until the next date of hearing,” the tribunal’s order said.
Donimalai mine has over 140 million tonne of reserves.

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