Steel maker SAIL has decided to outsource development of two huge virgin iron ore mines at Rowghat in Chhatisgarh and Chiria in Jharkhand, a company official has said. "Rowghat -- which will have a capacity of 14 million tonne per annum and Chiria -- 15 MT are crucial for SAIL's capacity expansion," Steel Authority of India Ltd (SAIL) Director (raw materials & logistics) A K Pandey told PTI here.
"We have decided to develop these two mines through mine developer-cum-operators. We hope to get a good response in this route being tried for the first time by the company," he said. It would cost Rs 1,000-1,200 crore each for developing Rowghat and Chiria mines, he said, adding that if this method is successful, SAIL's investment for mine development would be reduced by around Rs 2,500 crore.
The public sector steel major has earmarked an investment of Rs 15,000 crore for expansion of existing mines and developing virgin mines. Stating that this concept is taken from Australia, he said in this route, the company would have long-term contracts with those who would develop and operate the mines.
They would make the investment and charge SAIL on per tonne basis, he said. This concept would be first implemented in Rowghat, where the contractor's responsibility would be to develop the mine, get iron ore, crush it and load it. After that it would be SAIL's responsibility to take the iron ore to its facility at Dalli-Rajhara 95 km away, for processing. SAIL, which would increase its capacity to around 24 MT by the end of next year from the existing 14 MT, would require 39 MY of iron ore by the end of 2013. He said global tender would be floated for this within a month and hoped to get a good response.
Pandey said all statutory clearances have been received for the development of Rowghat mine. The company has also sought central para-military forces for developing the mine which was in a Maoist-hit area in Chhatisgarh.
A railway line is also being laid from Dalli-Rajhara to Rowghat which would cost Rs 700 crore, he said. On Chiria mine in Jharkhand, he said environment clearance and first stage forest clearance have been received, while land acquisition is on.
Hatch Associates of Australia has done the detailed project report for the Chiria mine, which would be designed with state-of-the-art technology. Pandey said sourcing iron ore is the biggest challenge for SAIL which has embarked upon a major expansion programme. Keeping this in mind the company has taken up expansion plan in its existing mines four years ago. Under this programme, the capacity of Bolani iron ore mine would go up to 10 MT from the current 4.6 MT and that of Kiriburu and Meghataburu increased to 5.5 MT and 6.5 MT, respectively. At present, Kiriburu's production capacity is 4.25 MT and that of Meghataburu 4.3 MT. These expansion programmes would be over by the end of next year, he said. Similarly, along with its existing mine at Barsua and Kalta in Odisha, a new mine would be developed at Taldih and their total production would be 8 MT, he said.
Another massive expansion programme was taken up at Gua iron ore mine, also in Jharkhand, under which its capacity would be increased to 10 MT from 2.4 MT. The expansion plan would be completed by 2016, he said.