SAIL assured of 50% ore deposits in Chiria

SAIL assured of 50% ore deposits in Chiria

The Centre says it has reached a consensus with the Jharkhand government on renewing the lease of SAIL for half of the iron-ore deposits, or 1 billion tonnes, in Chiria. An understanding has also been reached on Jharkhand renewing the lease on Gua mines.

Mining lease for the other 1 billion tonnes in Chiria will be linked to a memorandum of understanding between the Steel Authority of India Ltd (SAIL) and the Jharkhand government. The MoU will ensure that SAIL invests in the state in a big way.

Steel ministry sources said this was the crux of the understanding reached with Jharkhand after negotiations over the past few months. The Jharkhand pollution board is likely to give a no-objection certificate to SAIL for Chiria. The board held a hearing on December 29.

SAIL is now considering a greenfield plant at or near Chiria to fulfil the MoU. At a meeting on the issue, SAIL had indicated to the state government that besides expanding Bokaro, it could also set up a greenfield plant in the state. Jharkhand officials wanted a slice of Chiria for other companies to attract new investments in the state.

SAIL has a 3.5-million-tonne steel plant in Bokaro. The company plans to increase this capacity to 7.5 mt in six years.

Sources said SAIL could set up another steel plant with a capacity of up to 7.5 mt or turn the Bokaro unit into a 15-mt plant.

The public sector company has already announced the setting up of a 7-million-tonne-per-annum iron ore beneficiation plant at Chiria.

After SAIL formally agrees to a new steel making facility at Chiria, around 11.5 mt of additional steel making capacity will be in place in the state, more than the plans of Arcelor Mittal in either Jharkhand or Orissa as well as Posco in Orissa.

SAIL got the lease over the lucrative Chiria mines when it acquired the Burnpur-based Indian Iron and Steel Company (now called IISCO Steel Plant) which was the original lessee.

Chiria’s almost virgin mines of high-grade iron ore deposits of about 2 billion tonnes are worth $250 billion at current London Metal Exchange (LME) prices.

Jharkhand’s bid to get back part of the mines, leased around 70 years ago, has been thwarted by court orders, which have favoured the leaseholder ”” SAIL.

In recent months, the Centre, Jharkhand and SAIL have been trying to thrash out the differences so that SAIL can keep its mining leases, without which the expansion plans of the steel giant in the state, from 12.5 mt to 23.5 mt, would be in jeopardy.

Officials also said, ”In respect of Rowghat Iron Ore Mines in Chhattisgarh, due clearances have been accorded by the ministry of mines to grant a lease to SAIL. The Chhattisgarh government has also issued a consent letter for the ”˜F’ deposit at Rowghat on January 9.”

Share this post