Prized possession

New Delhi, June 9: The mines ministry today awarded the world’s largest steel maker, ArcelorMittal, a mining lease for an iron-ore bearing land spread over 500 hectares at Meghataburu in Jharkhand.

This is the first iron ore mining lease in India for the company, which plans to set up two large steel plants in Jharkhand and Orissa.

The concession was among the five awarded by the central government at a meeting last week.

The government gave a small mining licence to the Modis at Tigodia, in Sagar district of Madhya Pradesh, and two prospecting licences in the Khara forests of Chhattisgarh to local sponge manufacturing companies.

The Jharkhand government had recommended ArcelorMittal for the lease at Meghataburu in west Singhbhum earlier this year. Mittal has promised to set up a 12 million tonne (mt) steel mill in Jharkhand in return for the grant of iron ore mines.

For ArcelorMittal, it will be the first iron ore mining lease in the country, though company sources said they were yet to receive any official communication.

Mittal had earlier been seen trying to acquire a part of the Chiria mining area, which the Jharkhand government has been trying to take away from state-owned Steel Authority of India Limited (SAIL) for allocation among private steel makers. But this exercise has been mired in controversy and legal challenges.

Jharkhand, as a consequence, had offered ArcelorMittal the Meghataburu plot as well as a prospecting licence at Ankua, believed to have deposits as good as Chiria, which reportedly has Asia’s largest repository of iron ore wealth.

The lease awarded by the mines ministry to ArcelorMittal is near a working iron ore mine run by SAIL, one of the company’s potential rivals.

SAIL plans

SAIL had also applied for a mining lease in May last year for a similar 500-hectare area in the same region. NMDC, too, had filed for two leases of 466 hectares each in the region.

However, Jharkhand is still to recommend these state run companies for any lease.

The state is yet to agree to SAIL’s expansion plans worth Rs 40,000 crore in the state.

SAIL has offered to spend the money in setting up a greenfield project at Manoharpur with a capacity of 12 mt besides ramping up output at Bokaro to 17.5 mt.

The unsaid quid pro quo is that Jharkhand renews the leases for Chiria which has an estimated reserve of 1.8 billion tonnes.

The steel behemoth has also filed for prospecting licences for 5,330 hectares at Karampada and 3,160 hectares at Ankua as well as for mining licences for 500 hectares of Megataburu-Karampada and 2,580 hectares in Ghatkuri.