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SAIL adds shine to Chiria plan

July 6: It’s an uncanny coincidence. A day before Lakshmi Mittal is scheduled to visit Bhubaneswar to discuss future investment proposals with Orissa chief minster Naveen Patnaik, the Steel Authority of India (SAIL) today announced a Rs 1800-crore spending plan to develop the Chiria iron ore mines in Jharkhand.

The public-sector steel company plans to spend this money on first-phase expansion, which will produce 7 million tonnes of high-grade ore. Mittals, along with the Tatas, have always had an eye on the lucrative Chiria mines.

LNM, accompanied by son Aditya and Malay Mukherjee, chief operating officer of Mittal Steel, will meet Patnaik to explore the possibility of setting up a greenfield plant in the state, which also has sizeable iron ore reserves. He could also plan a ferro chrome project in the state.

Industry believes Mittal is keen to keep another front open in India as his 10-million- tonne Jharkhand project is being delayed over mining lease. Moreover, another possible MoU with Orissa will keep the pressure on Jharkhand to act fast.

The pressure was palpable when Jharkhand mine minister Madhu Koda reacted sharply to Mittal’s move: “Orissa can never fulfil Mittal’s requirements. Jharkhand alone has that potential. Still, he is free to carry out extensive market survey.”

Incidentally, Orissa too has signed 43 MoUs for steel plants, including Posco, but it is yet to award mining rights to any big-ticket project.

The Jharkhand government also contested Mittal Steel’s claim of a delay in grant of mining lease. The company is yet to apply for lease, it said.

Mittal Steel, now Arcelor- Mittal, had signed an MoU with Jharkhand last year, along with many others including the Tatas and Jindals.

Koda said the state was doing its bit to facilitate Mittal’s 10-million-tonne steel plant. “We are even considering allowing joint ventures between Mittal Steel and the Jharkhand State Mineral Development Corporation. That apart, we have huge iron ore reserves in Ghatkori. Fresh surveys are being carried out as well. Allotment of iron ore mines to Mittal Steel on time will not be a problem for us,” Koda added.

Mittal’s move may have stemmed from the uncertainty over Chiria mine, which has over 2.5-billion-tonnes of high- grade ore, a sizeable chunk of which is with SAIL.

There is a widespread belief that Chiria is the only known good-quality iron ore reserve in Jharkhand.

The Jharkhand government had cancelled two mining leases out of the 10 blocks SAIL had in its possession on the pretext that the state- owned steel company had not developed them for many years. However, SAIL had contested the move and status quo was being maintained on the two blocks.

Koda said the government has now filed a petition in high court pleading that mines that were lying idle with SAIL for the last 20 years be returned so that these could be allotted to potential companies.

Chiria was originally owned by IISCO, now merged with SAIL. Having turned sick, IISCO could not develop the mine, as it did not require the deposit.

SAIL, meanwhile, has completed preliminary jobs like environment impact assessment study and an application has been made to the Jharkhand State Pollution Control Board for a “no objection certificate”. A detailed project report will be ready by July.

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