Bastar steel plant: Chhattisgarh govt puts NMDC on notice

The National Mineral Development Corporation (NMDC), country's biggest iron ore producer and exporter, has come under the scanner of Chhattisgarh government with Chief Minister Raman Singh threatening to ban transportation of mineral from its facilities if the mining major fails to initiate the process of setting up its proposed steel plant in Bastar.

The proposal for the plant was finalised in early 1990s, but the foundation stone was laid by the then deputy prime minister L K Advani in September 2003. The Rs 300-crore state-of-the-art project of NMDC was to come up with the unique Romelt technology developed by Moscow Institute of Steel and Alloys (MISA), Russia.

The NMDC Iron and Steel Plant (NISP) at Nagarnaar, about 20 km from the headquarters of Bastar in Jagdalpur, was planned to produce 3 lakh tonnes of pig iron per annum in the first phase and 15 lakh tonnes per annum in the final phase by adding two more modules of 6 lakh tonnes each.

A total 403 hectares of land was acquired, including 288.99 hectares of private land and 114.01 hectares of government land. Even four years after the laying the foundation stone, the NISP could not initiate the process of starting the project. A boundary wall constructed by the company is the only work completed so far.

"The state government is giving all facilities to set up the plant in the tribal-dominated Bastar region. But it will not entertain delay," Singh told reporters here today, giving a clear indication that the government had taken up the issue seriously and would come out with stringent action against the company.

The CM said if the company delayed the project further, the government would cancel the land allotted to the NMDC and give it to others willing to set up the plant. "The state government could even consider banning the transportation of iron ore from the NMDC facilities in the state," Singh added.

The NMDC manages iron ore mines only in Chhattisgarh's Dantewada district and has a balance reserve of 390.68 million tonnes (as on April 2007) in its Bailadilla facilities. A major part of the mineral is exported to Japan.

Senior NMDC officials here refused to react to the statement stating that officials from the company's headquarters in Hyderabad would give the official version.

However, sources told Business Standard that the cost of Romelt technology had increased considerably, forcing the company to put the steel plant proposal on hold. The company was now considering another proposal to set up a sponge iron unit at the proposed site, they added.