Union minister of steel and fertilisers Ram Vilas Paswan and chief minister Shibu Soren deliberate on the lease issue in Ranchi on Wednesday. Picture by Prashant Mitra

Ranchi/Delhi, Sept. 24: Steel Authority of India Limited (SAIL) will go ahead with plans to set up a new 12 million tonnes steel plant near Chiria with the logjam over renewal of mining lease of the Asia’s largest iron ore depot nearing a solution.

A series of meetings with the new chief minister of Jharkhand, Shibu Soren, which started with SAIL chairman S.K. Roongta flying down to Ranchi last week and was followed up by Union minister for steel Ram Vilas Paswan today, has resulted in the state government promising to allocate resources from Chiria area first to SAIL and then only consider demands for iron ore from private players like Tata Steel and ArcelorMittal.

“The Jharkhand government will first consider the request of iron ore requirement of SAIL. Private sector players’ claim over Chiria will be considered only after SAIL’s requirement is met. After all, it was leased out to SAIL (actually to its sister concern Indian Iron and Steel Company),” said Soren.

Soren backed the case of SAIL today just after an hour-long closed door meeting with Paswan. Union minister of state for food processing Subodh Kant Sahay was also present in the meet.

Paswan, who for the first time held a meeting with Soren after the latter became the chief minister, said he was extremely glad with the decision.

“Soren has promised me to solve the matter by October this year. Earlier, during the Arjun Munda and Madhu Koda regime, the state authorities failed to take any firm stand on the Chiria issue,” said Paswan.

“I am very hopeful of our problems being sorted out soon,” said a visibly happy Roongta, talking to reporters.

The steel ministry officials, interpreting the comments of Soren, felt that lease for 1.8 billion tonnes of iron ore bearing land would be renewed in Chiria. Leftover land in Chiria area as well as in surrounding Ankua would be used for allocation of mines to competing steel-makers such as Mittals, Essar and Jindals.

At present, the issue of Chiria hangs in balance in Jharkhand High Court. But now with the state government changing its stand, the matter might be solved out of the court.

SAIL has plans to set up a 12 MTPA capacity greenfield project and a 7 MTPA capacity plant in the state in addition to the plant in Bokaro. Paswan said SAIL’s ore requirement for its proposed greenfield and expansion projects would be around two billion tonnes.

But, considering the fact that Chiria’s expected reserve is just over 2 billion tonnes, private investors such as Tata Steel and ArcelorMittal would find themselves in a tricky situation.

Though ArcelorMittal, which has proposed to set up a 12MTPA greenfield project in the state with a proposed investment of Rs 40,000 crore, has been allotted Karampada (65MT) reserve in West Singhbhum, there could be a huge gap between the demand of the proposed plant and the supply.