Indian state-run iron ore miner, NMDC Limited has formally filed a legal challenge against the government of the southern state of Karnataka for claiming 80 percent premium on sales as condition for renewal of Donimalai iron ore mines, sources said on Tuesday, December 18.
The sources said that NMDC has filed a legal petition before the Karnataka High Court with the latter setting January 10, 2019 for the first hearing of the case.
It might be noted that the dispute arose between NMDC and Karnataka government last month when the latter renewed the lease for Donimalai in favor of the state miner but with a clause that NMDC will need to pay the government 80 percent premium on sales as lease rental.
NMDC thereafter closed down operations of the mine claiming that such high lease rental will make operations unviable and such rentals could not be legally imposed in case of renewal of existing lease agreements.
NMDC produced an estimated 6 million mt of iron ore per annum from the Donimalai mines.