New Delhi, May 9: Bowing to the Jharkhand government’s pressure, SAIL has decided to produce more steel in the state and raise further the capacity of the Burnpur plant of IISCO Steel.
The Jharkhand government had told SAIL that it was willing to let the public sector company access the iron ore mines at Chiria if it is for capacity expansion only within Jharkhand and in Burnpur, Bengal.
“The state (Jharkhand) government has told us that they are willing to allocate iron ore from the Chiria leases for any capacity expansion in Jharkhand and Burnpur,” SAIL chairman S.K. Roongta told The Telegraph today.
In the original plan, SAIL wanted to raise the capacity of the Burnpur plant to 3.2 million tonnes and Bokaro Steel, which is in Jharkhand, to 7.5mt.
The plan now is to add another 25mt, raising the combined capacity for Jharkhand and Burnpur to 35mt.
This is way above the projected capacity of 25mt by 2012 for the SAIL plants in Bokaro, Rourkela, Durgapur and Burnpur.
The Chiria mines in Jharkhand have reserves of around 2.1 billion tonnes. The ore is the best in Asia and SAIL and Jharkhand have been at loggerheads over the mining rights.
SAIL plans to raise the capacity of the Burnpur plant to 6mt by 2020. For Bokaro, the plan is to raise the capacity to 17mt against 7.5mt earlier. This is based on a study by Mecon.
SAIL is also keen on a greenfield plant at Manoharpur, near the Gua mines of IISCO. This is likely to be a 12mt plant, and it may come up in two phases.
However, plans for the area rests on a new pelletisation plant.
“We are now not only talking of ramping up Bokaro to 17mt from the current plans of 7.5mt but also starting a greenfield steel plant at Manoharpur which will initially have a capacity of 6 mt but with a possible second phase of another 6 mt,” Roongta said.
He said the new proposals were likely to be included in the company’s corporate plan till 2020.
The projected 35mt addition will create a demand for ore of about 60mt a year. “Chiria which has 2 billion tonnes of reserves can supply this ore uninterruptedly for 30 years,” Roongta said.
SAIL is pulling out all the stops to prevent Jharkhand from giving a part of Chiria to a rival.
SAIL got the mining rights for Chiria after it acquired IISCO which was the original leaseholder.
However, Jharkhand had said it would renew the leases only to the extent of ore required by IISCO and the projects of SAIL in the state.
The Centre had objected to this. It said it was wrong on the part of the state to allocate a scarce resource only for projects within its territory.
However, in the absence of a policy on sharing mineral resources, states have been insisting on steel-making capacities within their territories before allocating or renewing iron ore leases.