Karnataka has offered NMDC a four-year lease deed for rights to resume mining of the Donimalai iron ore deposit however, effective from 3 Nov’18 and conditional to a premium of a provisional 22.5%.
On 17 December, the state’s commerce and industry department wrote to the director of mines and geology asking it to execute a lease deed of “four years or till the implementation of committee’s report.” This committee, that the Centre had promised in August, is to decide what premium government-owned companies such as NMDC must pay for rights bagged outside of an auction. The state also wants an undertaking that NMDC will not claim any refund in case the committee recommends a figure below 22.5%.
This may disappoint stakeholders who had hoped for greater security of tenure from the August solution ending a two-year deadlock preventing NMDC from mining the 7 mnt deposit. Already, Chhattisgarh has demanded to be treated at par for allowing NMDC to produce 25 mn t in its state.
After an in-principle approval of the interim arrangement between state and centre, Karnataka had allowed mining to resume. However, the state’s latest order suggests that without a forest clearance, which requires a lease deed, NMDC has not been able to resume work.
Background
In 2018, while considering a 20-year extension of the Donimalai lease, Karnataka demanded a premium which it had begun getting from mines it was auctioning under the 2015 mining act that granted rights through competitive bidding. It asked for a 80% premium from NMDC too despite government-owned companies being governed by separate rules.
In August, the Union Mines Minister sat with the state’s Chief Minister and worked out a compromise on behalf of NMDC: 22.5% would be paid as premium until a committee decided what government-owned companies must pay to have their pre-2015 leases extended.
Not out of the woods
Donimalai, whose entire 608 hectare is categorised as forest , had a clearance dated 6 Feb’08. In the past, the state had approved diversion of forest area for a period 20 years from 04 Nov’08. Communications between departments suggest this clearance, in the absence of a lease, will not do. The Principal Chief Conservator of Forests has clarified to the Director of Mines and Geology that there is no provision of interim permissions under the Forest Conservation Act, 1980.
Leave a Reply