Ore tussle

New Delhi, Oct. 26: State-run Steel Authority of India Ltd is planning to establish a greenfield steel plant at Chiria.

The move is part of an effort to arrive at a settlement with the Jharkhand government over the Chiria mines which SAIL owns — a part of which the eastern state has been trying to take back.

A meeting on the issue taken up by the Prime Minister’s Office some time back, resulted in SAIL indicating to the state government that besides expanding Bokaro, it could set up a greenfield steel plant in the state.

This was indicated after Jharkhand officials had pointed out that they wanted a slice of Chiria to attract fresh investment in the state.

SAIL already has a 3.5-million-tonne steel plant at Bokaro, Jharkhand’s largest industrial unit. SAIL has also drawn up plans to increase this capacity to 7.5 mt within six years. Sources said SAIL could set up another steel plant with up to 7.5 mt steel making capacity or take the Bokaro unit to turn it into a 15-mt mega plant.

The public sector company has already announced that it would be setting up a 7-million-tonnes-per-annum iron ore beneficiation plant at Chiria.

If this comes about, it would mean putting in place some 12.5 million tonnes of added steel making capacity in the state.

The SAIL proposal would be larger than the plants being promised by either L.N.Mittal for his planned venture in Jharkhand or Posco’s planned venture in Orissa.

Steel minister Ram Vilas Paswan also indicated that SAIL was in talks with the Jharkhand government and a memorandum of understanding on plans for steel mills may be signed with it.

The Jharkhand government has long been trying to get back the lucrative mining lease which was initially with Burnpur-based Indian Iron & Steel Company and now stands transferred to SAIL after IISCO was merged with SAIL.

Chiria's almost virgin mines of high-grade iron ore deposits of about 2 billion tonnes are valued at current LME prices at an astronomical $250 billion. The Jharkhand government’s bid to get back a part of the mines leased some 70 years ago for re-issue to private entreprenuers has been thwarted till now by court orders which have tended to favour the lease-holder — SAIL.

In recent months, the Centre, the state government and SAIL have been trying to thrash out differences to persuade Jharkhand to agree to let SAIL keep its mining leases without which the planned expansion of the steel giant from a current 13.5 mt to 22.5 mt may well run into trouble.

The Centre has already decided to compress the Chiria mine development plan into three years for two reasons: they need the mines for the ambitious expansion plans and also need to convince the Jharkhand government that it is serious about investments in that state.

SAIL has drawn up plans to invest some Rs 6,000 crore in fresh investments in the Bokaro steel plant in the state and another Rs 2,000 crore in Chiria itself within the next three to five years.