Steel Authority of India (SAIL) will invest around Rs 3,000 crore to quadruple capacity of its Gua iron ore mine in Jharkhand to 10 million tonnes per annum (mtpa) and put up a four mtpa pelletisation plant.
"SAIL has decided to increase the production capacity to 10 mtpa in Gua. This will cost the company Rs 2,087 crore. At the same time, a 4 mtpa pellet plant will also be put up with an investment of Rs 865 crore," a steel ministry source said.
The official said techno-commercial discussions are in progress now for increasing the capacity at the mine and the contracts for developing the mine are likely to be finalised by October this year.
The Gua mine was commissioned in 1958 and has 142 million tonne reserves. Though the mine has a production capacity of 2.4 million tonne a year, it could produce only half a million tonne in the last fiscal for want of forest and environment clearances for most part of the year.
The mine has remained closed since June last year in the absence of environment and forest clearance hitting the iron ore production of the state-run company hard.
SAIL is making efforts to reopen the mine, located at the Saranda region, as soon as possible.
SAIL has already submitted the mine wildlife conservation plan to the Ministry of Environment and Forest. Mining will be started on getting clearances from the Jayanthi Natarajan-led ministry.
The Gua mine supplies ore to SAIL steel plants in Burnpur and Durgapur (both in West Bengal) among others.
SAIL mostly sources its iron ore requirements from captive mines. However, following the ongoing capacity expansion plan to take the total steel-making capacity from 14.35 mtpa now to 23.46 mtpa by next fiscal, this would create an additional 16 mtpa iron ore requirement.
The company has nine operating iron ore mines and in the last fiscal had a combined production of 22.35 million tonnes.