The National Mineral Development Corporation (NMDC), a public sector enterprise, on Wednesday said it would resume operations at Donimalai iron ore mine, which it had temporarily suspended about eight months ago, in accordance with the Karnataka High Court order.
“The company has approached the Government of Karnataka to facilitate execution of lease deed and resumption of operations at Donimalai mine. The resumption would avoid further loss to national and State exchequer apart from providing much-needed iron ore to the steel industry for the development of the State,” a release from the NMDC said. Separately, sharing details of the operative portion of the order with the stock exchange, the company said the Karnataka High Court has allowed its writ petition and set aside the State government order in which it was decided to levy a higher premium on the average sale price of iron ore.
In November, informing the stock exchange of its decision to temporarily suspend production from Donimalai mine, the NMDC had said it followed the Cabinet of Karnataka government approving the mining lease of Donimalai for a period of 20 years, up to November 3, 2038, on payment of 80% of the average sale value as published by the Indian Bureau of Mines.
The company had contended that “such condition is not as per the MMDR (Amendment) Act-2015, read with Mineral (Mining by Government Companies) Rule-2015 and the same is also not economically-viable”.
In the press release on Wednesday, NMDC chairman and managing director N. Baijendra Kumar said, “Though it had been a long wait for the NMDC, this news has brought in lot of cheers, especially to steel-makers of Karnataka, investors, mining fraternity, customers and employees who have been eagerly waiting for this”.