Steel Authority of India (SAIL) has succumbed to the pressure of the Madhya Pradesh government for a railway connection in a bid to resolve its tussle with the state authorities over clearances for its Rs 750-crore mining project at the Rowghat iron ore deposits.
According to company sources, the final clearances for the mining project would be given by the state government only if investments are made by the steel company for the railway connection
The connection would join the Rajahara mining area, where SAIL at present mines prime ore to feed its Bhilai plant, with Jagdalpur district.
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Significantly, SAIL would be able to begin mine development activities at Rowghat only after the railway tracks are laid, sources said.
The company has been compelled to give in to the state government's demand as its Bhilai plant will be in urgent need of alternative iron ore deposits about five years from now.
An interesting aspect of the state government's demand is that SAIL would have to begin construction simultaneously at the two ends of the rail connection.
This clause, according to the state government, would ensure that SAIL does not leave the connection unfinished after reaching Rowghat from Rajhara. Rowghat is situated between Rajhara and Jagdalpur.
The National Mineral Development Corporation (NMDC) has also been roped in by the state government for the railway connection.
The Rowghat iron ore deposits are situated 180 km away from Bhilai and has a total iron ore reserves of about 750 million tonne.
SAIL has taken an initial lease for mining 250 million tonne which would be expanded in accordance with future requirements.
It will make an initial investment of Rs 750 crore to develop the area. The company plans to mine an average of three million tonne of ore per annum.
"The superior quality ore from Rowghat will be combined with lesser quality ore from the Dalli mines for the plant."
At present prime iron ore is extracted from Rajhara but with the reserves steadily dwindling there, there is an urgent need to find alternative deposits, sources added.
"Bhilai steel plant is an iron ore-based plant and which makes prime quality ore very crucial for its operations." sources explained.
Mine development work is expected to take about five years before the ore can actually be extracted. "If mine development work can begin now, then we will b ahead of schedule for mining." they said.
The expected life of Rowghat mines is about 50 years and the steel maker has taken the deposits on lease for 30 years which will be renewed when the need arises.
The clearance from forest department, which was a major hindrance to the project, has already come in, sources added.
According to company sources, final clearances for the mining project would be given only if investments are made by the steel company for the railway connection