The central government today said it had granted a licence to ArcelorMittal for prospecting iron ore in the Karampada region of Jharkhand, a move that would boost the steel giant’s proposed Rs 50,000-crore project in the state.

“We have approved one of the recommendations of the Jharkhand government to grant prospecting licence to ArcelorMittal over 662.95 hectares in Karampada region,” Mines Minister B K Handique said.

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“We have sent back one proposal for grant of prospecting licence over 416.93 hectare to the Jharkhand government for some clarifications and approved the another,” he added.

A prospecting licence is approved by the Centre in favour of a mining entity on the recommendation of the state government where the mines are located. After getting a licence, in the case of iron ore, within three years, the company has to apply for the licence.

The area for which the prospecting licence has been granted to ArcelorMittal is estimated to house about 200 million tonnes of rich iron ore.

The world’s largest steel maker had entered into a pact with Jharkhand in 2005 for setting up a 12-million tonne per annum steel plant in Bokaro at an estimated cost of Rs 50,000 crore. But, the steel maker has been facing inordinate delays in land acquisition and regulatory hurdles to launch the venture.

Faced with opposition from villagers from the Khunti and Gumla areas, where the plant was proposed earlier, the company is making efforts to acquire land at Petarwar in Bokaro district of the state. The entire project requires around 8,000 acres.

The London-based NRI billionaire L N Mittal, who heads the steel giant, had last month said the company was "anxious" to start work on its proposed greenfield projects in the country, which entail an estimated investment of Rs 1.30 lakh crore.

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