"There is no proposal to transfer lease of some parts of the Chiria mines to Mittal Steel. Sail is not in a position to share resources of Chiria mines as iron ore resources with Sail are not sufficient to meet its long-term requirements," Minister of State for Steel Jitin Prasada told the Lok Sabha in a written reply to a query.

Following the Jharkhand government's decision to reject the renewal of three mining leases of Steel Authority of India Ltd (Sail), the matter was now pending with the courts and the Steel Ministry has been attempting to have it resolved out of court, the Minister said.

Chiria has iron ore reserves of approximately 1,850 million tonnes. The six mining leases of the said mines were alloted to erstwhile Indian Iron and Steel Company Ltd (IISCO) and following its merger with Sail, these leases have passed on to the latter.

Of the six leases, three are under deemed extension while the application to renew the remaining three leases were rejected by the state.

Sail is envisaging a hot metal production of 26 million tonnes by 2010-11 and 50 million tonnes by 2019-20 and as a result it would require iron ore of about 5,700 million tonnes. However the availability of ore reserves currently with Sail is only 3,400 million tonnes, the Minister said.

Prasada said Sail has applied for iron ore leases in various parts of the country, including 1,529 hectares of lease in A, B C, D, E blocks of Rowghat mines in Chhattisgarh, Karampada, Ankua, Ghatkuri and Meghataburu in Jharkhand, NEB in Karnataka and Kanjamalai in Tamil Nadu.

Besides, another state-run steel company Rashtriya Ispat Nigam Ltd (RINL) has also applied for iron ore blocks in view of its capacity-expansion programmes, he said.

RINL envisages to achieve a production capacity of 6.8 million tonnes by 2011-12 from the current 2.91 million tonnes, Prasada said.

The Minister said Sail's input costs have increased significantly between 53.6 per cent to 349.5 per cent between 2004-05 to this year primarily due to mismatch in demand and supply, upward trend in international prices and increase in transportation costs.

According to figures of the steel ministry, the cost of coking coal has shot up by 202 per cent per tonne in this fiscal as compared to 2004-05, while iron ore prices have spiraled high from Rs 894 per tonne this fiscal as against Rs 504 per tonne in 2004-05.

Limestone prices have shot up to Rs 1,861 per tonne in 2008-09, against Rs 1,198 in 2004-05. The long term agreement price of iron ore supplied by state-run mineral giant NMDC has increased by 60 per cent while spot prices of the mineral has spiraled up by 133 per cent and prices of Chinese met coke has increased by 116.7 per cent thereby exerting pressure on the bottom lines of leading steel utilities.