The Telegraph
Sunday , August 24 , 2014
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Coal hope for Tatas

Calcutta, Aug. 23: Tata Sponge Iron Ltd, a Tata Steel subsidiary, hopes to source coal from Radhikapur (East) mines at Talcher in Odisha after the Delhi high court allowed the company to restart the process of obtaining forest clearances.

“Once the clearances start flowing in, we can look towards mining from the block,” said Tata Sponge managing director D.P. Deshpande. This will lower the company’s dependence on Coal India and imports.

Environment clearance is necessary to start mining. The process involves rehabilitation of the displaced habitants and re-creation of forest land.

Deshpande said the company had received land from the Odisha government for the rehabilitation of around 10,000 habitants.

The sponge iron maker, which started developing the block in 2006-07, has spent over Rs 180 crore to develop the mine and may invest more after receiving the clearances.

The company’s delay in making the block operational had prompted the coal ministry to order that the bank guarantee be forfeited.

Based on the suggestions of an inter-ministerial group in February this year, the ministry has also recommended deallocation of the coal block. The company had subsequently approached the Delhi high court against the order.

Sponge iron price

Deshpande said sponge iron prices could go up by Rs 400-500 per tonne on account of a revision of royalty rates on iron ore from to 15 per cent from 10 per cent. Sponge iron prices are in the range of Rs 21,600-22,000 per tonne.

At present, Tata Sponge has a manufacturing facility at Joda in Keonjhar district of Odisha.