State-owned miner NMDC Limited may spend nearly Rs 2,300 crore to increase iron ore production from its Bailadila mines in Chhattisgarh by about 9 million tonnes per annum, according to official sources.
The miner has already approached the Ministry of Environment and Forests for necessary clearances for mining activity, the sources said.
"The proposal has already been submitted to the MoEF for enhancement of production of iron ore from Deposit no.4.
The estimated capital cost of the project will be Rs 1,899.74 crore," sources said.
It is expected that the mine can generate 7 million tonnes per annum over a period of time, sources indicated.
The mine is basically to cater to the iron ore requirement of upcoming 3-million tonnes integrated steel plant being set up by NMDC at Bastar and also other steel industries in Chhattisgarh, sources said.
"Another proposal is to expand the capacity of existing mine (Deposit No.10) from 4.2 million tonnes to 6 million tonnes with an investment outlay of Rs 385 crore," they further said adding that the life of mine will be about 37 years with a production rate of 6 million tonnes.
The investments will be made on the mines as and when required, sources explained.
The Bailadila iron ore range is estimated to contain 1,200 million tonnes of high grade iron ore distributed in 14 deposits.
NMDC is presently producing about 20 million tonnes of iron ore from its Bailadila sector mines and 10 million tonnes from Donimalai sector mines in Karnataka.
NMDC has set a target of achieving 50 million tonnes production of iron ore by 2016-17. The PSU produced 30.2 tonnes during 2013-14 against 27.18 tonnes in 2012-13.
It also expects its 3 million tonnes per annum capacity Nagarnar steel plant in Chhattisgarh to be commissioned by 2015-16.
All the major packages of the project have been awarded, a senior official of the company had earlier said.