The Jharkhand government on Monday refused an out-of-court settlement for the disputed Chiria mines, currently under the control of the Steel Authority of India Ltd, and said that the iron ore demands of the country’s largest steel producer were “inflated”.
While SAIL has been pushing for a settlement, the state government, under pressure to provide iron ore mines to steel producers, said in a meeting with the Centre that it wants “the law to take its course.”
Chiria mines have an iron ore reserve of 2.4 billion tonnes and constitutes 80% of the total 3.7 billion tonne reserve in the state. Rotterdam-based Arcelor Mittal, the world’s largest steel producer, had earlier asked for access to Chiria mines as a precondition for a proposed Rs50,000 crore, 12 million tonne (mt) plant in the state.
Its plans in Jharkhand remain unclear, pending allotment of a mine.
A senior state official, who did not want to reveal his name, said the iron ore requirements of SAIL will be met, but it must give a “realistic picture” of its needs. “SAIL has to give us its correct requirement,” he said. SAIL, he said, will submit a report within 10 days.
A SAIL spokesperson, who withheld his name citing company policy, said: “The meeting was not conclusive. Another meeting will be held”.
Both the state and SAIL have been locked in a legal battle over at least four of the 12 mining leases in Chiria. The steel producer’s renewal contract for mining leases for Ajitaburu, Sukrilatur, Tatiburu and Jhilingburu were rejected by the state government, after which SAIL approached the mining tribunal, which resolves cases surrounding mines. Following this, the state government moved court. Three more leases are under review.
SAIL had last month earmarked a total of 2,710mt as a requirement to build a new 5mt steel plant and for expansion of its existing steel plants in Jharkhand. It stated in a report that it is running short of iron ore by 954mt to meet its 50-year requirement target.
But the state government said the request is higher than what SAIL would require under the national steel policy’s projections.
Going by the steel policy’s estimate, SAIL’s requirement should be 1,120mt and not 2,710mt, the official said.
SAIL’s iron ore requirement for existing plants is 481mt. But it says it requires 1,119mt for expansion and another 1,110mt for new steel projects, totalling to 2,710mt.
Jharkhand, with nearly 48 letters of intent for new and expanded steel projects, heavily depends on mineral reserves to boost development.
The meeting was attended by Jharkhand chief secretary A.K. Chugh, steel secretary R.S. Pandey and mines secretary J.P. Singh, among others.
The National Steel Policy 2005 had set a steel production target of 110mt by 2020. Although there are no official reports yet, steel minister Ram Vilas Paswan has said domestic steel requirements may touch 175-180mt.
According to the state official, SAIL has not fully exploited its current resources in Chiria, and the average iron ore yield has been roughly 0.6mt. “If SAIL wants to keep what it cannot exploit, where is the iron ore going to come for other players in the private sector?” he asked.