Donimalai lease issue resolved, paves way for resumption of mining: NMDC

Public sector enterprise NMDC on Friday said the issue related to Donimalai iron ore mine lease extension that resulted in mining remaining suspended at the asset in Karnataka for two years now has been resolved.

Paving way for operationalisation of the mine, the development comes at a time when steel companies are facing a shortage of supply of iron ore.

“The long pending issue of Donimalai iron ore mine (ML No.2396) of NMDC, which was suspended since November 2018, has finally concluded through the endeavour of the government. The decision has not only paved way for operationalisation of the mine but also is a timely decision...” a statement from the company said.

The Centre, Karnataka Government and Ministry of Steel have reached an agreement to extend the lease, the company said, without sharing the specifics. At the heart of the issue was the proposal of Karnataka Government, two years ago, to levy a higher premium on the average sale price of iron ore, as a condition to extend the mine lease.

The release said Donimalai iron ore mine, which has total concession area of 597.54 hectare and estimated resource of 149 MT, will increase the annual iron ore production in the country by 7 MTPA. “Based on the existing high price of ore, it is expected that Donimalai iron ore mine will contribute around ₹400 crore to the State exchequer, during the ongoing financial year,” it said.

The operationalisation of the mine would contribute around ₹1,100 crore to the State exchequer per annum. It will also take the country a step closer towards the vision of the government to achieve 300 MTPA crude steel capacity by 2030-31. The mine will offer direct employment to thousands of people, including contract labourers, and create indirect employment opportunity for many more.

The release said resumption of mining would bring a sense of security for more than two dozen small and medium enterprises, with hundreds of employees, near Donimalai area that were directly or indirectly dependent on NMDC for supply of raw material. Further, the local community dependent on NMDC CSR activities will not be deprived of benefits like hospital, free transport and RO water facilities.

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Printable version | Jun 15, 2021 4:12:56 PM |

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