Salboni project on hold till ore fix

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  • Published 29.04.13

April 28: Sajjan Jindal today made it clear that unless he got iron ore on a long-term basis, he would not proceed with JSW Steel’s Rs 35,000-crore project in Bengal’s Salboni.

Jindal’s position on Salboni reflects the problems faced by JSW Steel in Karnataka because of a shortage of ore.

“It (Salboni) is stalled right now, it’s on hold. Unless we are going to fix the iron ore matter, unless we have the visibility of iron ore, we cannot move ahead. It’s on hold,” Jindal, who is the chairman and managing director of JSW Steel, told PTI.

JSW is working with the Centre and the state government to secure a mining lease for the 10-million-tonne Bengal plant, Jindal said, adding long-term visibility of iron ore is required to begin construction of the plant.

When asked about a timeline for the project, he said: “Nothing (is) in my control. The project is stalled at the moment.”

Responding to JSW’s decision, Bengal industries minister Partha Chatterjee said, “It is now clear why the project is delayed, contrary to the perception that bureaucratic hurdles are holding up the project. The Bengal government has provided all that was required for the project — land, water, coal mines.

“The state government along with the JSW management are working together on our demand to the Centre for a national iron ore policy for an uniform supply of the ore among all states to make such projects smooth and more viable,” Chatterjee said.

The minister added, “We will go with them. But, after all it is the company which has to secure the iron ore. How is iron ore coming for their Vijaynagar project? Do they have mines there? If it can run that plant without iron ore mines, why can’t (it run the) Bengal plant?”

Later in the day, a JSW Steel statement said they were committed to the Bengal project. “We remain committed to our Salboni project in Bengal and have already invested Rs 600-1000 crore towards this initiative. We are working with all stakeholders to move this project forward and contribute to the development of Bengal,” JSW said.

JSW’s Bengal project, announced in 2007, has been delayed for various reasons, including a land acquisition row with the state government after Mamata Banerjee took charge in 2011.

The issue has been resolved and land acquisition has been completed.

The company is not willing to move further on any new project, including Bengal, without securing either a long-term supply pact or a captive mine because of its experience in Karnataka.

In Karnataka, the company runs a 10mt plant but it neither has any captive mine nor any long-term supply pact and the company has to source the ore from the open market.

For more than one-and-a-half years, JSW has been running the Karnataka plant at a reduced capacity because of ore crunch in the state.

At present, all ore in the state gets auctioned because of a Supreme Court direction, thereby increasing the raw material cost for the company.

JSW’s Bengal project was envisaged to have a 10mt steel plant along with a 1,600MW captive power plant at a total cost of Rs 35,000 crore, requiring about 4,300 acres.

In the first phase, the company planned to set up a 3mt unit and a 300MW captive power plant with an investment of Rs 20,000 crore.

Deallocation of the Gourangdih ABC coal block last year by the coal ministry has added to JSW’s woes.