NMDC to take a position Rs 2,300 crore to boost production

NMDC to take a position Rs 2,300 crore to boost production

NEW DELHI: State-run NMDC Ltd hopes to resume production at the Donimalai mine in Karnataka — which was mired in controversy over renewal — because the new mining laws favours the corporate and discussions at the upper level were underway for extension of the mining lease.

The country’s biggest ore miner plans to spend about Rs 2,300 crore in cost next year to boost production and also develop two new coal blocks allotted by the govt . To ease the concerns of shortages of the key staple , it plans to boost production by the maximum amount as 50 per cent to 48 million tonnes (MT). 

“Our production will surpass 32 million tons this year to succeed in 41 MT in FY21, and 48 MT including the 7 million plenty of ore from the Donimalai mine in Karnataka. Supplies will come mainly from our mines in Chhattisgarh, aside from Donimalai,” Amitava Mukherjee, Director of Finance, told Express. Recently, the Chhattisgarh government has extended leases of NMDC’s four mines within the state to avoid interruptions in ore supply to the steel sector. 

The Karnataka government withdrew the lease for Donimalai in November 2018 after NMDC denied higher royalties from profits demanded by the State. Four months after the Centre amended the Mining and Mineral Development Act making it mandatory for state governments to renew public sector mining leases without browsing the auction process, the stalemate over renewal of the Donimalai mining lease in favour of NMDC continues.

The matter is now pending with a Mines Tribunal. the event comes when over 200 merchant mines leases are expected to be cancelled in March and placed on auction, squeezing domestic ore supplies to an excellent extent.

Over next three years, NMDC plans to double production as most customers build up production within the ensuing years.