Chhattisgarh government threatens to cancel NMDC’s iron ore mining lease

Wednesday, 27 May 2020 11:27:25 (GMT+3)   |   Kolkata

The face-off between the state government of Chhattisgarh and iron ore miner NMDC Limited has intensified with the former threatening to scrap the mining leases granted to the company for failure to meet financial commitments to the state government, state government officials said on Wednesday, May 27.

The officials said that Chhattisgarh chief minister Bhupuesh Baghel has communicated to the federal ministry of steel seeking the issuing a directive to NMDC Limited to ‘act responsibly’ and meet commitments made to the state government at the time of renewal of the mining lease in favor of the miner, which the company has failed to meet.

Last year, the Chhattisgarh government had renewed the mining lease of NMDC Limited, with the latter giving assurance that it would meet all commitments to the state government. NMDC’s iron ore mines in Chhattisgarh state account for over 90 percent of the company’s total annual production.

However, according to the state government, NMDC was to deposit an amount estimated at $216 million under the ‘common clause judgement’ for the extension of the mining lease, which had been due to expire on March 31, 2020, until September 11, 2035. But NMDC had deposited just $80 million with the state government.

NMDC operates three iron ore mining complexes, of which two are located in the Dantewada district in Chhattisgarh and the third in the southern Indian state of Karnataka.

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