Jharkhand, SAIL bury hatchet over Chiria

The Jharkhand government has reached an agreement with the Steel Authority of India (SAIL) to supply minerals from the Chiria iron ore deposits and the deal is expected to be formalised through an out-of-court settlement by June-end.

Both SAIL and the state government have agreed to withdraw their pending cases against each other, Jharkhand chief minister Madhu Koda said. This would, in all likelihood, end the long-standing dispute over the Chiria iron ore deposits, he added. The cases would be withdrawn immediately after a final round of minister-level talks in New Delhi this month.

Koda said the Chiria iron ore deposits would be shared between the state government and SAIL in the ratio of 49:51 or 52:48. The Jharkhand government was willing to accept minor deviations as it did not want any confrontation with the centre over the Chiria mine deposits.

The secretary-level talks between the centre and the state government were over and Koda would be going to New Delhi to hold talks with the union steel minister Ram Vilas Paswan to give a final shape to the deal.

Koda said that the state government had agreed to share the Chiria iron ores only after SAIL and the centre had assured the state government that SAIL would make substantial investments in Jharkhand if it was assured ore supply from Chiria. SAIL had reportedly given an undertaking to the state government that it would set up one more steel plant in Bokaro.

The Jharkhand government had earlier refused to extend the lease enjoyed by SAIL on the Chiria mines till it received a firm commitment from SAIL about further investments in the state. The state government had a watertight case as the Chiria mines belonged to Indian Iron & Steel (IISCO), the sick steel plant located in Burnpur in West Bengal before falling into SAIL's lap following the merger of IISCO with SAIL in 2006. This constituted a change of ownership, authorizing the state to determine which entity should enjoy the right to exploit the mines, it felt.

The Chiria mines are located in the West Singhbhum district and have an estimated reserves of nearly 2 billion tonnes of high quality iron ore. The deposits at Chiria are considered as one of the largest iron ore deposits in the world.

A large number of investors, including Mittal Steel (now Arcelor Mittal), Tata Steel, Essar and others were interested in leasing the Chiria mines. SAIL has decided to set up a greenfield steel plant of 10 million tonne capacity at Bokaro and to raise ore mining capacity of the Chiria mines to 7 million tonne by 2010-11.