Mittal’s Rs 20,000 crore greenfield project may get a fresh lease of life following Madhu Koda’s decision to restart talks with the company.
KOLKATA: Lakshmi Niwas Mittal’s Rs 20,000 crore greenfield project in Jharkhand may get a fresh lease of life following Jharkhand chief minister Madhu Koda’s decision to restart talks with the company, bringing to the table offers of new iron ore mines.
The Jharkhand chief minister met Sanjeev Sengupta, director at the India office of Mittal Steel in Delhi on Tuesday. Koda has conveyed that while the prized Chiria mines, which was being eyed by it, cannot be offered, the state government was willing to earmark other ore reserves, exclusively for Mittal.
Sengupta told Reuters the firm was looking for an assured ore supply of 600 million tonnes over the next 30 years. “We are keen, they are keen and we have to reach a position where we get the iron ore,” Sengupta said.
Earlier in the day, he had said the company was ready to agree the investment if it got “reasonable assurances” concerning access to ore mines.
Follow-up meetings are likely over the next two weeks.
Mittal, of course, never officially mothballed the 10-million-tonne Jharkhand project, but with the company signing a memorandum of understanding with the Orissa government for an identical project of similar investment, it was clear that Orissa had emerged as a favoured destination in comparison to Jharkhand. Officials representing Mittal had reportedly said that without firm linkages with ore deposits in Chiria, the Jharkhand project could not be considered.
“The state government fully appreciates the need for iron ore linkage of required quantities over a specified period of time to ensure viability of the proposed steel plant. Apart from Chiria, Jharkhand has other iron ore reserves like Ankua and these can be offered to Mittal,” state government officials said.
“The chief minister will discuss issues of iron ore and other aspect of Mittal’s investment plans for Jharkhand with the company officials. The government has an open mind on facilitating every aspect of the project. As far as the state government is concerned, the project was never scrapped,” officials said.
It is learnt from sources in the state government that crux of fresh negotiations with the steel major will be the quantum of reserves that could be made available for Mittal.
The latter had been insisting on bulk of the seven blocks that comprise Chiria with total estimated reserves put at 1,400 million tonnes of some of the best grades of ore in the world. But despite initial opposition of the state government, Steel Authority of India Limited (SAIL) is likely to take full control of Chiria and has already earmarked Rs 1,800 crore investments to develop it.
Sources said that Mittal may not settle for just Ankua mines with estimated reserves of 400 million tonnes as the company wants access to reserves of at least 600 million tonnes to be mined over 30 years. Jharkhand, with total ore reserves of 3,289 million tonnes, third in the country after Karnataka and Orissa, can earmark other reserves, but Mittal may bargain hard on contiguous deposits and grades of ore made available, officials said.
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