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Indian steel firm's mining plans in lush forest may be nixed - sources

Reuters  |  NEW DELHI 

By Neha Dasgupta and Mayank Bhardwaj

(Reuters) - India's environmental authorities are likely to cancel a plan by a state steel company to dig for more iron ore from a massive reserve located in a lush green forest roamed by elephants, sources said, as the aims to halt in the area.

Steel Authority of Ltd (SAIL) was banking on the mine in the country's east to supply a big chunk of its raw material needs for a multi-billion-dollar expansion of its steel production capacity.

produces only around 800,000 tonnes a year from a section of the Chiria mine but was targeting to raise that to 7 million tonnes in the next few years, to lift its steel capacity nearly four times to 50 million tonnes by 2030/31.

"Getting forest clearance for the mine under existing guidelines is a challenge," Sunil Kumar Barnwal, the mines secretary of Jharkhand state where the mine is located, told

"There are also special environmental conditions in Saranda forest region that need to be fulfilled to get clearance."

Saranda is home to endangered species of flying lizards and is also an integral part of an elephant corridor. But years of around the area by various companies have led to a 21 percent drop in the elephant population between 2010 and 2016, according to an environment ministry report.

The federal is now considering stopping all activity in the area, two sources with direct knowledge of the matter said.

If the expansion does not go through, it would also be a disappointment for resources conglomerate Adani Enterprises, which was working on bidding for a contract to operate the mine on behalf of

Adani, which has been struggling to secure funding for a big coal project in Australia, is looking to enter the iron ore and copper business in amid soft demand for other businesses such as coal trading, analysts say.

and Adani did not respond to requests for comment. An environment ministry spokesman did not comment.

Chiria has proven reserves of around 1 billion tonnes and had announced its ongoing modernisation and expansion plans factoring in iron ore from the mine, said a company source.

SAIL's other iron ore mines have reserves likely to last only up to eight years more, added the source, who declined to be named as he did not have permission to talk to the press.

(Reporting by Neha Dasgupta and Mayank Bhardwaj; Additional reporting by Jatindra Dash; Editing by Krishna N. Das and Manolo Serapio Jr.)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 07 2017. 13:44 IST