NMDC gets state approval to resume mining at Donimalai

The Karnataka government has permitted public sector mining giant NMDC Ltd to restart mining operations at its Donimalai mines in Ballari district.

The state government issued an order on December 1 permitting the mining company to commence mining operations after the company agreed to pay unconditionally 22.5% of the IBM Sale Price apart from Royalty and other statutory levies. This amounts to 150% of the royalty amount.

The government has allowed resumption of mining operations at Donimalai Iron Ore Mines (Mining Lease No.2396) spread over an extent of 608 hectares at Doniamali range in Sandur taluk of Ballari district. The company’s mining operations were shut down at Donimalai from November 3, 2018 onwards after the state government demanded 80% premium for renewing the mining lease. Subsequently, NMDC had moved the Mines Tribunal and had obtained a stay order. The matter is still pending before the Tribunal.

However, the mining operations can resume at Donimalai only after the company secures environment clearance and forest clearance, for which the company had filed an application two years ago, sources told DH.

“Subject to availability of necessary statutory approvals under the Forest Conservation Act and Environmental Protection Act and any other applicable law, the Department of Mines and Geology shall take necessary steps to ensure issue of Mineral Dispatch Permits to NMDC Ltd,” the government order said.

NMDC has a mineral plan approved for Donimalai. According to the plan, the company can produce 7 million tonnes per annum. At the time of suspension of mining operations in 2018, the company had employed 1,200 permanent workers and around 600 contract workers at the mines. NMDC also operates another mine -- Kumaraswamy iron ore mine in Ballari district.

During the meeting between the chief minister B S Yediyurappa and Mines Minister Pralhad Joshi held on August 28, it was decided that the company would pay a 22.5% premium in addition to royalty. Subsequently, the state cabinet, on September 15, 2020, accorded approval to allow NMDC to conduct mining operations in Donimalai iron ore mines.

During the meeting, it was also decided that the Mines Ministry will undertake review of the Mining by Government Companies Rules, 2015 for bringing amendments to decide the amount payable as percentage of royalty in respect of mining leases granted prior to January 1, 2015 to government companies for which extension is sought.

In this context, a high level committee will be constituted of representatives from Union Ministry of Mines, Union Ministry of Steel and State Representatives which shall examine and propose the modalities for the extension of mining leases allocated to state and central PSUs within 3 months.

In a tweet, Joshi said: “I welcome the government order issued by the state government. The decision will help in achieving the 300 million tonne iron ore production target set by the Narendr Modi government by 2030-31.”