Petroleum minister Murli Deora (left) with ArcelorMittal CEO Lakshmi Mittal (centre) and CFO Aditya Mittal in New Delhi on Wednesday. Picture by Prem Singh

New Delhi, July 25: The battle for Chiria was fought and won in the corridors of the capital’s Udyog Bhawan today, far from the red mud-caked jungles of Jharkhand.

ArcelorMittal chief L.N. Mittal, who met steel minister Ram Vilas Paswan for a tête-à-tête at his office in the evening, managed to extract a promise of official help to acquire a 600-million-tonne slice of Chiria’s rich iron ore reserves for the company’s proposed 10-12-million-tonne (mt) plant in Jharkhand.

Paswan said ore beyond SAIL’s requirement of 2 billion tonnes in Chiria and in its vicinity could be made available to private sector companies such as ArcelorMittal.

“Chiria has a reserve of more than 3 billion tonnes of iron ore. The Mittals can be accommodated from the extra one billion tonnes available,” Paswan said.

Chiria’s proven reserves are placed at about 2 billion tonnes, spread over five blocks. However, the reserves at Ankua — a sixth block within the Chiria area for which SAIL had a prospecting licence and which it now seems is willing to give up — is estimated between 400 million tonnes and 600 million tonnes.

Paswan’s assurance to Mittal came hours after SAIL chairman S.K. Roongta told reporters that “we have a legitimate right over Chiria”.

Steel Authority of India Ltd took over the mining and prospecting rights of Chiria after it acquired the ailing Burnpur-based IISCO Steel Plant which held the original leases for the reserves that are considered the largest in Asia and best in terms of quality.

However, the Jharkhand government had cancelled the lease for two blocks, with reserves of 600 million tonnes, while renewing SAIL’s lease over three blocks that have reserves of 1,400 million tonnes.

SAIL has successfully challenged the move before a mining tribunal, and the case is pending before Ranchi High Court.

But with big names involved, the Prime Minister’s Office has stepped in to broker an out-of-court settlement.

To keep all the five blocks, SAIL had earlier said it would ramp up its capacity in Jharkhand to 29 million tonnes and at IISCO to 3.2 million tonnes by 2020.

It is not clear what the compromise deal will be. SAIL, on its part, is seen to be interested in keeping the five leases, while letting go of Ankua.

The twist in the tale is in the decision taken by a group of ministers to go for auctions while allocating reserves as it is considered more transparent than offering leases.

Since the move has to be ratified by Parliament, it will take about six months to complete the exercise.

If a reconciliation between SAIL and Jharkhand occurs before the approval by Parliament, the state government is likely to allocate a part of the reserves vacated by the PSU to private companies such as ArcelorMittal and the Ruias.

Essar’s Prashant Ruia also had an appointment with Paswan today. However, no one was available from the Essar group to comment on the meeting.