Dempo plan to invest Rs 850 cr in Jharkhand

Group awaits state government approval for the project

The Dempo group, one of the oldest mining group of Goa, has pledged an investment of Rs 850 crore in three phases in Jharkhand.

While the Dempos have extended the investment plans and memorandum of understanding to the state government, it is yet to get any reply from the authorities.

This will be the first major out-of-Goa venture for the group, though they have started a small venture in Maharashtra where by 2010 they expect to start productions of iron-ore concentrates.

However, with the quality of iron-ore much superior to any of the ores available in Goa, Maharashtra or Karnataka, the plans for Jharkhand are much bigger.

Tej Bahadur Sahib, chief superintendent of mines, Dempo Group of Mines, said: "We are interested in both Jharkhand and Chattisgarh mines, and only exclusively in iron-ore. But unfortunately we got a cold shoulder from the Chattisgarh government. While the Jharkhand government is also slow in acting upon the plans and giving the lease, they have accepted our proposal."

The Rs 850 crore project includes the Rs 200 crore investment in the first phase, when mining will be started.

The duration of the project is two years from the day of the grant of the lease.

The second phase of investment will be worth Rs 250 crore when Dempos propose to start the pig-iron production.

In the third phase, with the beginning of steel production, the investment will be Rs 400 crore.

Along with the rich-grade iron ore mines, Dempos has proposed to take over the low grade iron ore mines around Chaibansa region in Jharkhand also.

Said Sahib, "Jharkhand lacks a port if we want to export from there. At the same time the government has already clamped down on exports of good grade iron-ore above 65 per cent. The domestic demand is also at a high with the auto market and infrastructure development booming. So even without exports, Jharkhand is a profitable venture "" moreover as coke plants are available within the state, steel will be cheaper.

In Goa we are producing pig-iron by importing iron-ore from Karnataka and coke from Australia. So raw material wise it is most lucrative.''

In the last four years, Indian iron-ore exports have mostly been driven by the demand from China and Japan, even when the iron-ore has been a low-quality one. While China is still expecting an eight per cent growth in the steel industry till 2010, it has now become more quality conscious.

Said Tej Bahadur, "The exports from Goa will continue as parties will demand this inferior quality iron-ore also. But now with both Indian and Chinese economy poised for a boom, it is best to get in high quality iron-ore mines as soon as possible. We are waiting for the Jharkhand government to give a nod for a 20-year lease, and immediately work will start."

"However, if this does not happen soon, we may get into a tie-up with private parties operating there, but it will be the last resort."