New Delhi, Dec. 21: Steel companies are making a beeline for iron ore reserves at Ankua, which is adjacent to Chiria.
The iron ore at Jharkhands Chiria is reportedly the best in Asia. Many companies are vying for a piece of Chiria, for whose control the Jharkhand government and Steel Authority of India Limited (SAIL) are in a legal battle.
Tata Steel is tipped to get a prospecting lease for over 1,800 hectares of Ankua, very close to SAILs Ajitaburu and McLellan leases in Chiria.
Top officials said the state had recommended the Tata proposal to the Centre.
Though the Centre has sent back the recommendation document to the state with some queries, the officials said these were routine clarifications and the Tatas would soon get the lease.
The queries relate to a case filed by Calcutta-based Brahmi Impex, which has alleged that the state denied it a lease despite meeting all the norms.
The Centre has already given a prospecting lease to the Jindal groups JSW Steel for 1,388.5 hectares of Ankua, adjacent to SAILs Dobhil mine in Chiria.
Sesa Goa, too, has a licence in Ankua, near Dobhil, while Essar is waiting in the queue.
SAIL has also applied for a licence to prospect 3,160 hectares of Ankua, near the area bid by the Tatas.
However, the officials said the Jharkhand government was unlikely to recommend SAILs plan because of the Chiria dispute. The state is keen to give a part of Chiria to ArcelorMittal.
In Chiria, SAIL says it has played by the rules and, therefore, it is illegal on the part of Jharkhand to cancel a part of its lease.
The rules stipulate priority in leases to the earlier lessee if it invested in prospecting.
A year ago, Jharkhand had also offered a part of Ankua to ArcelorMittal, which did not show any great interest, preferring to wait for the outcome of the legal and political tussle over Chiria between the Madhu Koda government on one hand and SAIL and the central government on the other.
Previous estimates show 1.8 billion tonnes of proven iron ore reserves at Chiria. This has been downgraded to 1.3 billion tonnes by mining consultant Mecon.
Geologists say Ankua forests, which have features similar to Chiria, can have the same amount of rich reserves, prompting the rush for Ankua, a Naxalite region.
As is with Chiria, the iron content of the ore in Ankua is as high as 62-64 per cent, the geologists said.
Besides, the reserves are possibly spread out over a wide area, with the ore beds as thick as Chiria.
For Tata Steel, Ankua is important as the ore is necessary to push its steel making capacity in Jamshedpur to 10 million tonnes.
The Tatas have mines at Noamundi in Jharkhand and Joda and Katamati in Orissa.
However, these reserves are depleting. Tata Steel needs new reserves of about 400 million tonnes for expansion.
The much awaited national mineral policy is unlikely to address the contentious issue of banning iron ore exports, with the mines ministry putting the onus of taking a decision on the finance and commerce ministries.