Karnataka Government could be soon extending NMDC’s Donimalai iron ore lease for 20 years, now that the PSU has agreed to a provisional 22.5 per cent premium.
While there was no official confirmation, senior officials of NMDC told SteelMint that they expect the government to confirm this very soon.
After a long deadlock, NMDC was all set to resume mining the 7 mn t pa Donimalai deposit albeit with a premium it hadn’t expected to pay. However, as SteelMint first reported on 25 December, the Karnataka Government had spooked everyone by offering to extend the lease only for four years and that too retrospectively from 3rd Nov. ‘18. Two people in the company, speaking on condition of anonymity, told SteelMint that the state government has now agreed to extend the lease for 20 years.
A possible Odisha debut
Meanwhile, Odisha Government is also believed to have recommended reservation of Teherai, a small deposit of 9 mn t reserves, in favour of NMDC for a period of ten years. This is in similar lines as Odisha Government had reserved two blocks for state owned mining company OMC, that had failed to start post auctions (https://www.steelmint.com/intel/indiaodisha-govt-allocates-two-auctioned-mines-to-omc-3704). NMDC is hoping to be given some more areas, according to people who attended a recent high-level meeting between the steel ministry and senior state officials.
Premiums and permits
SteelMint cannot at this point clarify whether Odisha will also seek a premium.
The premium NMDC has agreed to pay for Donimalai in Karnataka – 22.5% per cent of IBM declared prices – is an interim figure until a committee decides what PSU’s must pay for a block that is not being auctioned.
When the union Mines Ministry had reached this compromise, there was no provision for such a charge under existing laws. This has now been incorporated in the “reforms” cleared by the union Cabinet recently.
The 608 hectare Donimalai area is categorised as forest for which NMDC may have to get a forest clearance once its lease has been granted.
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