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India's Karnataka state cancels mining lease extension for NMDC's Donimalai mine

The Karnataka Government in India cancelled the mining lease extension it had granted to National Mineral Development Corp. Ltd., or NMDC, for the Donimalai iron ore mine, Press Trust of India reported Aug. 20, citing an exchange filing.

The state had previously approved a 20-year extension of the mining lease until Nov. 3, 2038, on the condition that NMDC agreed to pay an increased 80% sales premium. However, the company refused and deemed the premium economically unviable and a violation of mining rules.

NMDC resumed mine operations in mid-July after securing a favorable decision from the High Court of Karnataka, which the government ignored as it reportedly plans to auction the mine. NMDC filed an appeal with the mining ministry, with a hearing scheduled Aug. 21.

NMDC's output has been decimated this year as its Bacheli and Kirandul mines in the state of Chhattisgarh were also suspended after protests by local tribes.