Bengal taps NMDC for iron ore supply

The West Bengal government, which has steel projects adding up to 35 million tons of capacity in the pipelines, has chalked out a new formula to lure investors.

The state government is set to enter into a pact with government-owned NMDC for a joint venture in coal and an iron ore offtake agreement could be an addendum to the arrangement.

West Bengal commerce and industry secretary, Sabyasachi Sen said, “We have been offering coal to investors so far while they had to arrange for the iron ore. Now we are looking at some kind of arrangement with NMDC so that we can give them iron ore.”

He was speaking on the sidelines of a meeting organized by the Merchants’ Chamber of Commerce.

Rana Som, chairman and managing director, NMDC confirmed that the public sector miner was in discussions with the West Bengal government.

He said, NMDC had applied for an iron ore mining lease in Jharkhand and could enter into an offtake agreement with the West Bengal government for the iron ore. However, iron ore was part of a larger agreement with NMDC, which was for coal. The West Bengal was awaiting allocation of a coal block in Birbhum and was likely to sign an MoU with NMDC for joint exploration. The MoU was likely to be signed with West Bengal Mineral Development & Trading Corporation (WBMDTC).

If the deal with NMDC happens then it would solve West Bengal’s problem since the state has no iron ore. In fact, NMDC had earlier carried out some exploration for iron ore in the state but the findings were not favourable.

In comparison, neighbouring states like Jharkhand and Orissa had both coal and iron ore and hence most of mega steel projects were concentrated there.

So far, most of the steel plants, that had decided to set up steel plants in the state planned to buy iron ore fines from the market and beneficiate it and set up a pellet plant as a first step.

West Bengal’s prized steel project, JSW Bengal Steel, which was setting up a 10 million ton plant, also planned to follow the same route. West Bengal’s steel projects in the pipeline currently entail an investment of more than Rs 1 lakh crore.