Steel Authority of India Ltd (SAIL) has decided to outsource development of two huge virgin iron ore mines at Rowghat in Chhatisgarh and Chiria in Jharkhand, according to a company official.
Rowghat, which would have a capacity of 14 MTPA and Chiria 15MTPA are crucial for the steelmaker's capacity expansion, PTI quoted A K Pandey, SAIL director (raw materials and logistics) as saying in Kolkata.
He said the company had decided to develop the two mines through mine developer-cum-operators and it hoped to get a good response with this route being tried for the first time by the company.
The development costs for Rowghat and Chiria mines would work out to Rs1,000-1,200 crore each, he said, adding that if the method proved successful, SAIL's investment for mine development would be reduced by around Rs2,500 crore.
The public sector steel major has earmarked Rs15,000 crore investment for expansion of existing mines and development of virgin mines.
Stating that the concept was from Australia, he said the company would sign long-term contracts with those who would develop and operate the mines. The parties would make the investment and charge SAIL on per tonne basis, he added.