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Tata Steel has got the approval from the Odisha State Pollution Control Board here to scale up capacity of its captive Khandabandh iron ore mines. The ramp-up is strategically important as the mine would exclusively cater to the requirement of Tata Steel’s Kalinganagar project where capacity is being jacked up to eight million tonnes per annum (mtpa) from three mtpa now.
“We have got the permit from the pollution board to expand capacity of Khandabandh mines. The company has the consent to operate the iron ore mines at eight mtpa. But, it will take us around three years to reach that output level”, said a company source.
Once the Kalinganagar steel project reaches its peak capacity of eight mtpa, its iron ore need would climb to more than 13 million tonnes annually. Apart from Khandabandh mines, Tata Steel’s other captive resources at Noamundi and Joda East would ensure iron ore supplies for the greenfield project in Odisha.
Apart from banking on its own captive supplies, Tata Steel is also eyeing the upcoming auctions of iron ore blocks by the Odisha government. Official sources said, the state has prepared four iron ore blocks for auctions and a couple of them may be auctioned even before the end of this fiscal. Tata Steel has earlier unsuccessfully bid for three iron ore blocks at electronic auctions in the state. Essar Steel, Bhushan Steel Ltd and Bhushan Steel & Power Ltd have emerged as the successful bidders.
The other option available for Tata Steel is a long-term iron ore linkage pact with Odisha Mining Corporation (OMC). The steel company on a trial basis has signed a pact with the mining entity for one year.
On the Khandabandh mines, Tata Steel has pledged an investment of Rs 2400 crore. Its current capacity is only one mtpa.
The steel maker expects its Khandabandh mines expansion to be through before the Kalinganagar steel project ramp up.
On Kalinganagar expansion, Tata Steel is investing Rs 23500 crore. The expansion is slated to be completed within 48 months from the start of construction.
The project configuration and costs includes investments in raw material capacity expansion, upstream and midstream facilities, infrastructure and downstream facilities including a cold rolling mill complex. At Kalinganagar, the steel company is looking to tap emerging, value added products and segments like construction & projects, pre-engineered buildings, oil & gas, lifting and excavation and shipbuilding.