Close on the heels of Supreme Court's order for cancellation of iron ore mining leases involving violations of law, including some in Anantapur district bordering Karnataka, Bangalore-based state-owned enterprise KIOC Limited approached the Andhra Pradesh government for grant of mining leases in the district.
State mining department officials said the order for cancellation of iron mines included about 6 mining leases in Anantapur district.
KIOCL managing director K Ranganath on Friday made this request to chief minister N Kiran Kumar Reddy while proposing to invest about Rs 8,000 crore in various value-addition processes, including beneficiation, pelletisation and an integrated steel plant, if the state government allocated iron ore deposits in the district. It would set up these facilities by forming joint ventures with various state agencies.
The company has sought both prospecting licences and mining leases for its project in Bommanhal and D Hirelal mandals and said the investments would generate direct employment to about 8,000 people, according to an official release.
KIOCL is engaged in the business of manufacturing and exporting high-quality iron oxide pellets and supply of pig iron for the domestic market. It operates a 3.5-million tonne capacity pellet plant besides a 216,000 tonne pig iron plant, according to its website.
Revival of interest
The revival of interest by the company in predominantly low-grade iron ore reserves available in the state comes after a decade. AP has lots of untapped low-grade iron ore reserves in five districts, including Khammam, Prakasam, Karimnagar, and Kurnool.
KIOCL had shelved similar plans for Andhra after it was allotted some low-grade iron ore mines in Prakasam district, held by the state government's Andhra Pradesh Mineral Development Corporation (APMDC), according to the officials. This was when N Chandrababu Naidu was chief minister.
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As the company did not follow up with its proposed investment plans, these reserves were subsequently transferred to a joint venture formed by APMDC and Gimpex, a local mineral player, for setting up mining and beneficiation ventures after YS Rajasekhara Reddy became chief minister, the officials in the mining department told Business Standard. The government had allotted 1,307 acres of land for the JV covering an estimated 66 million tonne reserves in Prakasam district.
It may be recalled that public sector iron ore behemoth NMDC also recently said it was keen on exploring the opportunities among those mines that are on the list of cancellation in Karnataka.
With quite a few decisions taken in the recent past with regard to iron ore reserves turning controversial, the state government proposed to allocate the same to public sector companies, including the Visakhapatnam Steel Plant (RINL).
An MoU between APMDC and Vizag Steel with regard to certain reserves in Anantapur district is already in the final stages, the officials said.
Similarly, the state government in 2010 permitted APMDC, NMDC and the Directorate of Mining to form a joint venture to extract low-grade iron ore reserves in four districts — 24 million tonnes in Kadapa, 30 million tonnes in Kurnool, 300 million tonnes in Chittoor and 16 million tonnes in Karimnagar.