NMDC to resume iron ore mining at Donimalai as HC rules in its favour

The Karnataka High Court ruled in favour of the state-owned miner in a dispute related to 80 per cent premium imposed by the state government.

NMDC Ltd suspended iron ore mining from Donimalai in Ballari district in November last year, after the state government by its order imposed a premium equivalent to 80 per cent of average sale price of iron ore while extending the mining lease for a period of 20 years.

Subsequently, NDMC filed a petition in the Karnataka High Court challenging the state commerce and industries department order imposing the premium, and closed operations at the mine.

In its 10 July order, a bench of Justices L Narayana Swamy and P S Dinesh Kumar allowed the petition of NDMC, holding that the impugned condition to levy premium while extending the period of lease was "unsustainable in law and liable to be quashed".

After closure of Donimalai Iron Ore Mine for more than eight months, NMDC is set to resume operations in accordance with the Honourable High Court of Karnataka decision, NMDC said in a statement.

NMDC has now approached the Karnataka government to facilitate execution of lease deed and resumption of operations at Donimalai Mine, it said.

The resumption of mining at Donimalai would avoid further loss to national and state exchequer apart from providing the much needed iron ore to the steel industry for the development of the state, the company said.

The news has "brought in lot of cheers" especially to steelmakers of Karnataka, investors, mining fraternity, customers and employees who have been eagerly waiting for this, chairman and managing director of NDMC N Baijendra Kumar said.