NMDC seeks to restart iron ore mine in Karnataka

Market: Metals
18/07/19

India's state-controlled NMDC has secured a favourable court order to restart operations at its 6mn t/yr Donimalai iron ore mine in the southern state of Karnataka, which has been shut down because of a royalty dispute with the state government.

Operations were halted in November last year after NMDC refused to pay substantially higher royalty payments to the state government.

The high court on 10 July dismissed the Karnataka state government's demand for higher royalty payments.

NMDC's other mine in the state, Kumaraswamy, which also has a 6mn t/yr run rate, has remained operational.

NMDC has asked the state government to reactivate its mining lease for Donimalai so that it can resume operations. There has been no response yet from the state government, which can appeal the decision in the Supreme Court.

NMDC is a major supplier of iron ore for Karnataka-based steel mills, which buy iron ore produced in the state through government-run online auctions, in accordance with a Supreme Court order passed in 2012. JSW Steel, which operates a 12mn t/yr steel plant in the state, buys iron ore from the Donimalai mine.

NMDC last month halted operations in the central Indian state of Chhattisgarh because of protests by indigenous tribes against the company's plan to mine iron ore at Deposit 13 in Bailadila, which the tribes claim includes a sacred hill.

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