JSW Jharkhand unit mine goes ‘no-go’

JSW Steel, the country’s second-biggest steel producer with a capacity of 7.8 million tonnes per annum (mtpa), may have to go slow on its Jharkhand plans as its captive coal mine in the state has fallen under the ‘no-go’ area.

Though JSW will not see any immediate effect of the regulation on its Jharkhand mine, it will need a separate mine if the issue is not resolved by the time the plant is ready.

The company plans to build a 10 mtpa plant in Jharkhand and is currently acquiring land for the project.

It had been allotted iron ore and coking coal mine in the state with reserves of 250 million tonne each. It also has plans to build a 900 mw captive power plant and a 6 mtpa cement plant in the state. The total proposed area for the plant is 6,500 acres, which is currently being acquired.

“We plan to have an up and running capacity of 10 mtpa in Jharkhand by 2020, which means the construction work at the project should start by around 2013.

By then if the issue is not cleared then the government will have to allot us a different mine,” said Sheshagiri Rao, director — finance, JSW Steel.

Recently, the ministry of environment and forests classified 203 coal blocks, including both coking and thermal coal, as falling under ‘no-go’ zone, which is almost 48% of the total coal mining area available in the country. It also put 350,000

hectares (ha) under the area where environmental clearance could be given.

But later, due to incessant lobbying by the coal ministry and corporates, the number of blocks under the ‘no-go’ zone was decreased to 126, leading to a 10% increase in the mining area.

Besides JSW Steel, there are several companies which see their expansion plans in jeopardy due to the recent move of environment ministry.

However, JSW Steel feels it will tide over the situation as the planned construction of the plant is almost three years away from now.

Currently, the company is focussing on its upcoming plant in West Bengal, where it plans to set up a capacity of 3 mtpa by March 2014 and expansion of its Vijayanagar capacity to 12 mtpa from 10 mtpa. It plans to have a running caapcity of 16 mtpa by March 2014.