The government today said it has granted licence to ArcelorMittal for prospecting iron ore in Karampada region of Jharkhand, a move which will give boost to 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 of land in Karampada region," Mines Minister B K Handique said.

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A prospecting licence is approved by the Centre in favour of a mining entity on the recommendation of the respective state government where the mines are located. After getting prospecting licence, in the case of iron ore, within three years, the company has to apply for the mining 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 steelmaker had entered into a pact with Jharkhand way back 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, Gumla areas, where the plant was proposed earlier, the global steel giant 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 LN Mittal, who heads the steel giant, had last month said that 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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