The Narendra Modi government has stepped in to resolve the Donimalai mine issue in Karantaka. The mine has been shut since November last year over a dispute between the state government and the National Mineral Development Corporation (NMDC). Union minister for mines, Pralhad Joshi has told Network 18 that he has asked the Karnataka government to keep its letter withdrawing the lease extension in abeyance and that the centre will work with the state to resolve the issue.

This comes after the Karnataka state government withdrew its earlier approval given to NMDC for lease extension of the Donimalai mine and said it will put it up for auction.

"The state had an objection regarding the revenue. I have told the chief secretary of the Karnataka government that the Government of India and the mines ministry will examine the issue and come to a common understanding. We want to resolve the revenue issue in coordination with the state. I have requested the Karnataka government to keep the letter in abeyance. We want to come out with a policy very shortly," Joshi told Network 18 in Bengaluru on Tuesday.

The Donimalai mine tussle started last November when the state government decided to put a condition that NMDC pay a premium of 80 percent on the average sale value of the iron ore from the mine.

The state argued that that it stands to lose Rs 30,000 crore without the premium charge and added that with NMDC controlling 143 million metric tonne of high quality iron ore at the mine, the state was not getting a proportional benefit.

NMDC argued that the statutory liability was only 15 percent royalty fee and added that the state does not have the prerogative right to keep the mine on hold.

NMDC had then moved the High Court and on July 10 the court ruled in its favour. However, in the same ruling, the court also said that the state had the discretion to extend the lease or not to.

NMDC notified exchanges on Tuesday stating that it has filed a 'Revision Application' against the Karnataka government with the mining ministry at the Centre.

First Published:Aug 20, 2019 7:17 PM IST