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Perth-based iron ore play NSL Consolidated has managed to weave its way through the complicated web of Indian mining bureaucracy, receiving a rare mining lease approval for its third iron ore mine.

NSL said yesterday the application for its AP14 mining lease, which lies 200km north east of Hyderabad in central India, was the first application in more than three years to be supported by the State Government of the region.

Yet the AP14 target, part of NSL's Karimnagar project, still faces further hurdles, with approval from the central government in Delhi needed before drilling can start.

The State Government green light for NSL comes as Australian and Canadian mining companies wanting to invest in mineral-rich India have criticised heavy bureaucracy and delays in the country. Some jurisdictions have been accused of corruption.

Perth based small-cap India Resources, which produces copper at the Surda project in north-east India, indicated in October it would abandon one of its coal mining prospects because of excessive delays.

The majority of India's coal mines are State owned. According to Bloomberg, the Government-controlled $2.2 billion Coal India owns about 220 of an estimated 320 mines in production, in construction or at the approval process.

NSL is mining at its Kuja and Mangal projects in south east India and is stockpiling ore as it ramps up its production plant this quarter.

NSL said its lease for the AP14 project had an exploration target of 62 million to 125 million tonnes of magnetite, at grades of 20 per cent to 50 per cent, at depths up to 20 to 25m across the slopes.

NSL managing director Cedric Goode described the approval as a "critical step" in pushing the project towards production.

"The quality of our submission, the scope of the project proposal and the bona fides created by our existing operations has been well received and were all significant contributors to our application being granted," he said.

NSL shares rose 0.7¢ to 4.9¢.