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Tata threat rattles state - Mine lease cloud on Tontoposhi plan

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By OUR CORRESPONDENT
  • Published 16.09.11
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Ranchi, Sept. 15: Tata Steel has threatened to abandon a Rs 40,000-crore plan to set up a 12MTPA steel plant in Jharkhand if the state government did not act on its application of a fresh iron ore lease.

Tata Steel vice-president (corporate services) Sanjiv Paul articulated the company’s stand in no uncertain terms today to chief secretary S.K. Choudhury, who was chairing a high-powered committee meeting to review progress of industrial projects for which MoUs had been signed.

The threat, that has come at a time when the Arjun Munda government is desperately trying to lift Jharkhand from its present state of industrial gloom, prompted the chief secretary to direct additional chief secretary A.K. Sarkar to assess the capacity of the mines allotted to the steel major so far.

However, the officials did not offer any explanation on record or assurances on what was holding back the allocation. Sarkar only said that the state government would once again assess the availability of ore in the deposits given to the company.

“We may take a decision in the near future after assessing the exact availability of iron ore and the demand put forth by the company,” he said.

While no official would go on record, the state government is generally understood to hold the opinion that the steel major had enough resources — mining leases — to fuel existing and proposed projects.

No wonder the steel major tried its best to convince state officials at today’s review meeting that the mines they had been allocated weren’t capable of feeding their existing project in Jamshedpur, let alone future projects.

Tata Steel was allotted 1808 hectare in Ankua of West Singhbhum for prospecting iron ore. But company officials claimed that Ankua was for the expansion of the Jamshedpur plant and not for the proposed greenfield project.

As per its MoU with the state government in 2005, Tata Steel proposed to invest over Rs 40,000 crore for a greenfield project in the Tontoposhi area of Jamshedpur near neighbouring Seraikela-Kharsawan district.

The company, which is in the midst of a capacity building exercise, aimed to increase the size of the Jamshedpur plant from present production levels of 6.8MTPA to 10MTPA by 2012.

“The company has been requesting the state government to allocate new iron ore mines to feed its greenfield as well as brownfield projects, but to no avail so far,” said Prabhat Sharma, head of corporate affairs in Tata Steel.

He explained that as per the MoU, the company was promised iron-ore mines with production capacity of 400 million tonne. “But the Ankua reserve allotted to Tata Steel in 2007-08 has a deposit of about 80 million tonne only,” he claimed.

The meeting also reviewed the progress of some big-ticket investments.

Bhushan Steel and Power, which wants to set up a 3 MTPA steel mill and a captive power plan, was found to be moving very slowly in developing the iron-ore mines allotted to it in the West Singhbhum region.

On the other hand, Jindal Steel & Power Limited (JSPL), that is pursuing a captive power plant in Godda district of Santhal Pargana, had made laudable progress. However, progress was slow in Dumka, where it is setting up a power plant, and in Asanboni in Potka district of East Singhbhum where it has proposed a 5 MTPA steel unit.

V S Dempo, another investor, hadn’t fared well, too, while work on the project of Abhijeet Group company Corporate Ispat was progressing well.

Besides, the chief secretary, industry secretary and mines secretary, today’s meeting at Project Building was also attended by commissioners of Kolhan and Santhal Pargana regions and deputy commissioners and additional collectors of Seraikela-Kharsawan, East Singhbhum, West Singhbhum, Godda, Dumka, Jamtara, among others.