Monday, 6 October 2014

Years after getting lease, SAIL yet to start Bhilwara mining

JAIPUR: The Steel Authority of India (SAIL) has not been able to make any headway in starting operations for iron ore mining in Bhilwara's Dhulhera mines even five years after the public sector undertaking was granted lease by the state government.

The mines in Dhulkhera are spread over 871 hectares with an estimated reserve of 150 million tonnes of iron ore.

SAIL was granted the mining lease by the state government on an undertaking that it would invest Rs 800 crore and set up a pellet plant with two million tonne per annum capacity at the sites.

Ashok Singhvi, principal secretary, mines, said that SAIL has not been able to complete various administrative formalities required before issuing the "letter of intent" and the state government has written to SAIL.

Jindal SAW which was also granted the mining lease much later than SAIL has started mining operations and has also put up a plant in Dedhvas village near the site where SAIL was granted the lease.

Singhvi said in 871 acres in which SAIL was to do mining work, 23.12 hectares were grazing field for which SAIL has to obtain a "no objection certificate" from the state's revenue department and there are large parts of land which belonged to the private owners for which the deal has to be done by the SAIL.

According to Singhvi, in the entire 871 acres, there are 102 hectares of land which is forest land and no mining work could be undertaken by the SAIL.

"SAIL has to submit the state government a diversion plan deleting the 102 hectares of forest land which comes under the mining area. Only after the diversion plan is submitted, the SAIL can go for environmental clearance. But SAIL has not been able to complete these administrative formalities," said Singhvi.

The state government has also written to SAIL saying that it has to submit a plan for setting up the palletization plant at the mining site and moreover the company will also have to deposit Rs 10 crore as bank guarantee for "keenness money."

Singhvi said even if the SAIL completes all the formalities obtaining environment clearance would require at least a year's time

The Bhilwara mine would help SAIL to partially meet its increased iron ore need as the company raises its steel-making capacity to 24 metric tonne per annum by next year from 14 mtpa at present. It generally requires 1.6 tonnes of iron ore for producing every tonne of steel.

SAIL never had iron ore problem and sources all its needs from captive source. Last year, it had produced 21.48MT ore to make 13.4MT crude steel.

However, going by the rate of capacity addition, its need for the key input would also rise in the same proportion. The Bhilwara mine would thus prove helpful for the company in the days ahead.

SAIL has also prepared a blueprint to raise its steel manufacturing capacity to 50 mtpa by 2025, involving an investment of Rs 1.5 lakh crore. To meet the growing need, it has started scouting for iron ore mines in Chhattisgarh, Madhya Pradesh, Maharashtra, Odisha and Karnataka.

The public sector company is also expanding capacities of its mines, as part of its Rs 72,000 crore ongoing expansion and modernization plans. Authority of India,SAIL yet to start Bhilwara mining

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