The Madhu Koda-led Jharkhand government will once again be pitched in the midst of rival steel companies, all gunning for Chiria.
KOLKATA: Chinese steel maker Sinosteel’s plans for an Indian footprint with a 5 million tonne (MT) steel project in Jharkhand will intensify the race for a piece of the prized Chiria iron ore mines.
The Madhu Koda-led Jharkhand government will once again be pitched in the midst of rival steel companies, all gunning for Chiria.
Of course, Sinosteel has made all the right noises about setting up the Rs 16,000 crore steel plant, linked to iron ore sourced from the open market. Jharkhand government officials said that the Chinese steel major has already sounded out the state government for a captive mine of its own.
Arcelor Mittal, which has also committed an investment of Rs 20,000 crore for a 10 MT plant, is also eyeing Chiria to source iron ore, and the Jharkhand government’s failure so far to offer any commitment has prompted Mittal to issue veiled threats of according priority to its Orissa project.
At the same time, the public sector Steel Authority of India Ltd (SAIL), India’s largest steel producer, has further queered the pitch for the race for Chiria by staking claim for the entire 2 billion tonnes of estimated and proven ore reserves. SAIL has communicated to the steel ministry that the entire reserves of Chiria mines would be required to feed the expanded capacities of its brownfield and greenfield projects under the company’s Corporate Plan 2010 that will augment its steel capacity to 27 MT.
The Jharkhand government and SAIL have locked horns over the former’s plans to develop Chiria mines. The original mining lease for Chiria was vested with the erstwhile Indian Iron and Steel Company Ltd (IISCO) and SAIL inherited the lease following the merger of IISCO with SAIL.
“Chiria has some of the best ore deposits in the world. It is natural for every steel company proposing investments in this state to look at it as source of raw materials. But it is virtually impossible for the state government to allow all steel projects — Arcelor Mittal, SAIL, Tata Steel or Sinosteel — to mine Chiria deposits,” Jharkhand officials said.
“There are other reserves in Jharkhand. But each investor demands large contiguous deposits, which is difficult for the state government to meet,” the officials said.
In a communication to the Centre and Jharkhand, SAIL informed that its total requirement of iron ore over the next 50 years would exceed its previous estimate of 2 billion tonnes, and this, in effect, meant that the public sector company wanted the entire 2 billion reserves of Chiria for itself.
Indicating fresh round of squabbles between Jharkhand and SAIL, government officials said the state government was agreeable to the plan to source ore only for its expansion plans of the Bokaro plant, to ramp up production to 7 million tonnes and IISCO to 3 million tonnes, and not for the expansion of other SAIL plants.
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