Chhattisgarh clears Hindalco, Balco mines

Aluminium majors""Hindalco and Balco""can take the raw materials to the other states from its mining facilities located in Chhattisgarh even as the state government is working on a proposal to restrict the use of rich minerals for the captive purpose only.

"Since the mining leases were allotted to both the companies before Chhattisgarh was carved, the erstwhile Madhya Pradesh government did not enforce any agreement to allow the companies to use the minerals for captive purpose only, which the state government is now planning to follow strictly," chief minister Dr Raman Singh said.

Hindalco has a major bauxite mining facility in Siridih of Sarguja district.

The company has been sending the raw materials to its plant located in Uttar Pradesh.

The Vedanta-owned Balco is sending bauxite mined in Kawardha district to its plant in Lanjigarh of Orissa.

Both the companies can heave a sigh of relief.

The norms set by the Chhattisgarh government for mining leases allowed leases to companies on the condition that it would use the raw material for captive purpose only.

The development is seen as important as both the companies are planning expansion of aluminium production outside Chhattisgarh.

While Hindalco entered into MoU with the Madhya Pradesh Government for its 3.25 lakh tonnes greenfield aluminium smelter to be set up in Siddhi of Madhya Pradesh with an investment of Rs 7,700 crore, Vedanta planned expansion in Jharkhand.

Chhattisgarh has 137 million tonnes of bauxite and shares about 4.68 per cent of country's total deposit of 2926 million tonnes.

Steel giants Tata Steel and Essar had planned major investments in Chhattisgarh and these would now come under the purview of the norms.

Both the companies had applied mining leases for iron ore deposits in Dantewada and Kanker districts of Chhattisgarh.

The chief minister said that if the companies did not set up plants, it would not recommend mining lease, or could cancel it in case the companies violated lease norms.

Tatas planned to set up a 5-mtpa Greenfield steel plant near Lohandiguda in Bastar district while the Essar Steel has proposed to invest in a 3.2-mtpa steel plant in Dantewada district.