New Delhi: Chhattisgarh chief minister Raman Singh has strongly backed the forest clearance for the National Mineral Development Corporation’s (NMDC’s) Bailadila 13 iron ore deposit located in the Dantewada district, stating that the mine is crucial for feeding the state’s 80-odd steel units.

This was revealed through the minutes of a meeting held with the Forest Advisory Committee (FAC) of the environment ministry.

The FAC had held a meeting on 29 and 30 April and the minutes were made public recently.

In 2012, the FAC had denied clearance for the mine, saying that the site is a reserved forest area. It has now asked the regional officer of the environment ministry to re-inspect the site along with a senior state government official and submit a detailed site inspection report with clear recommendations.

NMDC had also earlier this year approached the Prime Minister’s Project Monitoring Group, which was set up to fast-track stalled large investment projects, for the speedy clearance of Bailidila deposit 13.

The minutes of the FAC meeting said that the chief minister had written to the environment ministry on 23 January and requested the ministry to grant forest clearance. The letter said that iron ore produced from this mine would be used by local sponge iron/steel-making units which are not getting sufficient iron ore from NMDC’s existing mines in the state. It added that to increase steel production capacity, Chhattisgarh “has to play a major role in supply of iron ore to the industries based in the state, generating ample opportunities for direct and indirect employment, particularly in the Naxal affected tribal region of Bastar."

The minutes add that the environment ministry is reconsidering the proposal in view of the state government’s and project proponent’s justification.

An official from the chief minister’s office said that he had written to the environment ministry regarding faster clearance for many projects including Bailadila. “This is a routine manner since NMDC is a PSU (public sector unit)," the official said, requesting anonymity.

A director from NMDC, also requesting anonymity, said that the FAC’s move is welcome, as the mine is a strategic asset considering that it holds over 300 million tonnes (MT) of iron ore reserves and the steel/sponge iron units in the state are in dire need of iron ore.

NMDC is India’s single largest iron ore producer, presently producing about 30 milllion tonnes (mt) of iron ore from three fully mechanised mines—Bailadila Deposit-14/11C and Bailadila Deposit-5, 10/11A (in Chhattisgarh) and Donimalai Iron Ore Mines (in Karnataka). Chhattisgarh accounts for about 80% of the production.

NMDC formed a joint venture, NMDC-CMDC Ltd, with Chhattisgarh Mineral Development Corp. (CMDC) to develop Bailadila deposit 13 as a standalone project of 10 mt per annum (mtpa) capacity, NMDC had said in its annual report for fiscal year 2010-11.

Industry analysts, however, are sceptical whether NMDC will see any benefits in the near term, though it could play out well for the company over the longer term. Sanjay Jain, a steel and metals analyst at Motilal Oswal Securities, said that though the mine holds significant reserves of iron ore, it is unlikely that the company will benefit in the near future. “It is a positive that things are moving forward with Bailadila 13 deposit. But getting the forest clearance and even developing the mine will take a while," he added.

To compensate for the biodiversity that will be lost due to the mining, NMDC has suggested a ‘Habitat Development Programme’ worth Rs8.05 crore, to be implemented over 20 years. The plan will cover soil and water conservation, improvement of fodder and grasslands, improvement of tree cover, conservation awareness and ecological monitoring, among others.

The environment ministry has asked for details about usage of forest land and also said that NMDC has not reclaimed mined out areas in the same region. It has quoted deposit number 14 of the Bailadila complex, where mining started in 1963, as an example. It has asked NMDC to submit global positioning system (GPS) maps of protected areas, other mines and forest cover.