SAIL shows big appetite for ore

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  • Published 4.05.07

New Delhi, May 4: The Steel Authority of India Ltd has informed the Centre and the Jharkhand government that its iron ore requirement for the next 50 years was much higher than its initial estimate of 2 billion tonnes.

This means SAIL will need all the ore at Chiria for itself. The Chiria mines in Jharkhand have reserves of around 2.1 billion tonnes. The quality of the ore is the best in Asia, and SAIL and Jharkhand have been at loggerheads over the ownership of the mines.

However, it is unlikely that Jharkhand will give Chiria to SAIL. Sources said Jharkhand would make available the Chiria ore only for SAIL’s expansion plans for Bokaro Steel Plant, which is in the state, and IISCO Steel Plant, which is at Burnpur, Bengal.

Global giants such as Mittal Steel are interested in Chiria.

Jharkhand had earlier tried to take away a slice of the Chiria mining lease from SAIL for distribution among private parties. However, it could not do so because SAIL went to court against the move.

The Centre is now trying to broker an out-of-court settlement between SAIL and Jharkhand.

Top steel ministry officials said the revised demand of SAIL was “way over the initial 2 billion tonnes we were thinking of and speaking of.”

Sources said the higher demand was because of the SAIL board clearing investment proposals that would take the PSU’s capacity to 25 million tonnes by 2012.

There are plans for more greenfield projects, which would further add to the demand. However, considering only the expansion plans for Bokaro and Burnpur, the demand for ore is much less, at 1 billion tonne.

The plan is to raise the capacity of the Bokaro plant to 7.5 mt. For Burnpur, the proposal is to raise its capacity to 3.2 mt.

However, SAIL wants to further ramp up capacities at Bokaro and Burnpur.

The target is to make Bokaro a 15-mt plant and Burnpur a 6-mt one by 2020.

If this expansion materialises, it means an ore demand of 1.8 billion tonnes just for these two plants.

House panel report

Meanwhile, steel PSUs were unable to spend nearly Rs 1,500 crore of their budgetary resources during the last fiscal primarily because of inflated estimates, which is bound to adversely affect their performance, a parliamentary panel has said.

“As compared to budgetary estimates of Rs 3,172.30 crore, steel PSUs have been able to utilise Rs 1,702.44 crore, which is barely 53.66 per cent of the allocated estimates during 2005-06,” the parliamentary standing committee on coal and steel observed in its report.