Kar­nataka gov­ern­ment TALKS TO RE­SOLVE Don­i­malai mine is­sue

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Ben­galuru/ New Delhi: The Steel Min­istry is in talks with the Kar­nataka gov­ern­ment to re­solve the is­sue of Don­i­malai iron ore block where NMDC sus­pended op­er­a­tions af­ter the state de­cided to im­pose 80 per cent pre­mium on sales from the mine, ac­cord­ing to sources.

Rep­re­sen­ta­tives of min­istries of steel and mines, state-run NMDC and the state gov­ern­ment met at Udyog Bhawan late last week to dis­cuss var­i­ous is­sues aris­ing out of the im­passe, sources said.

An ac­tion plan re­quired to be put in place to com­pen­sate for short­fall in iron ore pro­duc­tion re­sult­ing from de­lay in ex­e­cu­tion of the min­ing lease in Don­i­malai was also dis­cussed be­tween NMDC and the Kar­nataka gov­ern­ment.

“Talks are on be­tween Min­istry of Steel, NMDC and gov­ern­ment of Kar­nataka to re­solve the is­sue,” a source said.

The mat­ter is ex­pected to be re­solved in the com­ing week, sources said.

Last week, NMDC said it has sus­pended iron ore-min­ing at the Don­i­malai mine in Kar­nataka fol­low­ing the state gov­ern­ment’s de­ci­sion to im­pose 80 per cent pre­mium on the iron ore sales from the mine.

The state cabi­net had ex­tended the NMDC’s min­ing lease for the block with ef­fect from Novem­ber 4 but with an 80 per cent pre­mium on ore sales from the mine, ac­cord­ing to Kar­nataka Min­ing Sec­re­tary Ra­jen­dra Ku­mar Kataria.

The Kar­nataka gov­ern­ment has in­di­cated that it was in the process of call­ing for fresh ten­ders for Don­i­malai mine and might go in for auc­tion in case NMDC did not sign the con­tract agree­ing for 80 per cent pre­mium in the next three weeks.

With 80 per cent pre­mium, NMDC would be los­ing Rs 1,348 per tonne and may re­sult in a loss of Rs 9.44 bil­lion per an­num as it mines about seven mil­lion tonnes of iron ore per an­num from Don­i­malai, the state-run miner con­tended.

P R Tri­pathi, for­mer CMD of NMDC has said the im­po­si­tion of ‘heavy’ pre­mium on a pub­lic sec­tor un­der­tak­ing is not ten­able ac­cord­ing to the law.

Kataria has said the state in the re­cent past had auc­tioned 12 mines where the weighted av­er­age of the pre­mium was more than 110 per cent and NMDC also par­tic­i­pated for mines for which it of­fered 95 per cent and 105 per cent as pre­mium.

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