SAIL's mine expansion plan hits hurdle

The reluctance of the Jharkhand government to renew the mining lease of the Chiria mines will stall the expansion of the giant iron ore mines currently under Steel Authority of India Limited (SAIL).

The public sector steel enterprise had planned to invest Rs 1,600 crore to modernise and expand the mines, which contain rich iron ore deposits, for its own consumption and for exports.

SAIL had decided to upgrade the Chiria mines through these were under its subsidiary corporate entity Indian Iron and Steel Company (Iisco). There has been a steep rise in the demand for iron ore in domestic as well as the international markets.

SAIL chairman V C Jain and Iisco chairman B K Pani had met the Jharkhand chief minister Arjun Munda to discuss.

But the mining department of Jharkhand government under Munda was now reluctant to renew the mining lease of three blocks incorporating the Chiria mines alleging that the virtually-closed Iisco, and by implication its parent, had violated mining regulations.

Iisco sources said the renewal of the lease for the Sukhil, Dhobil and Ajita zones under the Chiria mines had been awaiting lease renewal since 1979.

Jharkhand mining department director I D Swamy told Business Standard that the application for lease renewal was pending as the state was contemplating action against Iisco for violating mining regulations at Chiria.

He said he was ignorant of any plans drawn up by SAIL for modernisation and expansion of mines at Chiria. The state could even cancel the mining lease, he warned.

Under the law, the government could penalise any mine licencee if it violated rules, but cancelling a mining lease was not legally tenable. Iisco has operating its mines in the Saranda forests for eight decades.

There were six zones under Iisco's Chiria mines - Sukhil, Dhobil, Ajita, Maclelon, Tatiburu and Ankua. SAIL has indicated that it may surrender the mining lease at Tatiburu and Anqua while the lease at Maclelon expires in 2005.

Mines bureau working on plan

Steel Authority of India Limited (SAIL) has appointed the Indian Bureau of Mines (IBM) to prepare a blue print for expansion of iron ore mines at Kiriburu and Meghataburu in Jharkhand.

The iron ore reserves at Kiriburu and Meghataburu, which supplies the Bokaro Steel Plant, could be exploited for only 10 more years unless expanded. SAIL plans to explore new areas to boost iron ore production by another 140 million tons per year.

IBM has started preliminary work and is expected to submit its report to SAIL within six months.

IBM would provide details on quality of iron ore, suggest methods to be adopted to expand the mines and indicate the estimated cost and time required for the mine expansion.