Steel Authority of India (SAIL) has achieved a breakthrough in the Chiria iron ore mines row with Jharkhand today recognising and agreeing to renew the mining leases to meet the company's current needs.
In the last couple of years the state government's refusal to renew the mining leases had thrown the race for Chiria wide open with global steel majors like ArcelorMittal eyeing a piece of the action in the area.
SAIL holds 10 mining leases in the area. These have an estimated two billion tonne (bt) of good quality ore.
''The state government has written to us on this. They have recently decided in-principle to renew lease on Gudaburu mines, which contain 810 million tonnes (mt) of iron ore reserves. They have also deceided to identify another 200 mt of reserves for lease renewal,'' SAIL chairman SK Roongta said in Kolkata on the sidelines of a national manufacturing symposium organised by the Indian Institute of Foreign Trade, Kolkata.
Roongta has gone on record with claims of having written assurance from the state government on renewal of mining leases in Chiria.
When taken together the two reserves have around one billion tonne of ore which would serve the current iron ore needs of SAIL. Chiria mines were under the Burnpur-based Indian Iron and Steel Company (IISCO) later taken over by SAIL and renamed IISCO Steel Plant.
Roongta said another one billion tonnes would be likely to be made available to its future needs.
SAIL operates one of its largest steel plants at Bokaro. The capacity of the plant is under expansion from 5 to 7 mt. The company has also indicated plans to put up a greenfield unit in the state with a planned steel making capacity of upto 12 mt.
The developments will formalise an agreement of 2006-07 between the company and the state government under which it had promised to renew SAIL's mining leases on reserves of one billion tonnes. The Jharkhand government, on its part had also agreed to renew leases on the remaining amount of another one billion tonne, subject to the company's planning to invest in new steel making capacity in the state.