NMDC to set up sponge iron facility in Bastar

The National Mineral Development Corporation is planning to set up a sponge iron unit instead of a steel plant proposed earlier in Nagarnaar of Bastar district.

The company had acquired a huge land for the project and recently came under sharp castigation from the state government for failing to start the construction work.

The state government had however refused to buy the new plan of the NMDC""country's biggest iron producer and exporter venturing into steel manufacturing sector""and said it would only allow a steel plant to come up on the land it had provided to the company in Nagarnaar, about 20 kms from Jagdalpur, the divisional headquarters of Bastar.

"We have received a proposal from the NMDC in which the company has expressed its interest to first set up a sponge iron unit to produce direct reduced iron (DRI) and later a steel plant in Nagarnaar," additional chief secretary (industries) P Joy Oommen told Business Standard.

The state government has not rejected the proposal, Oommen said, but has asked the company officials to re-consider its plan. "They (the NMDC officials) have assured to get back soon after discussing the matter at higher level," the official added.

The company officials have however refused to speak on record and hinted that the plan to set up sponge iron unit in Nagarnaar is in the final stage. The officials attributed some technical and practical reasons for failing to set up a steel plant in the proposed site.

The NMDC has recently come under sharp criticism from the state government for delay in starting the work of the proposed steel plant in Nagarnaar. The foundation stone for the plant""the proposal for which was designed in early 1990s""was laid by deputy prime minister L K Advani in September 2003.

The state government acquired 403 hectares of land that includes 288.99 hectares of private land and 114.01 hectares of government land and handed it over to the NMDC Iron and Steel Plant (NISP)""the entity of NMDC for executing the Bastar steel plant project.

Chhattisgarh chief minister Dr Raman Singh recently lashed at the company and threatened to take back the land besides choking the transportation of iron ore from its Dantewada facilities if it further delayed the project.