ArcelorMittal seeks alternative captive mining site in Karnataka

Withdraws earlier application for captive mines in Donimalai region citing poor quality of iron ore

The world’s largest steel maker ArcelorMittal, which has proposed to set up a 6 million tonne per annum steel plant at an investment of Rs 30,000 crore in Karnataka’s Bellary district, has withdrawn application for captive iron ore mining lease citing poor quality of ore. The Karnataka government had identified Donimalai region in Bellary district for allocating iron ore mine to the company.

The company in an official letter to the state government has said it has found poor quality of iron ore in the area earmarked for it through an exploration. The exploratory studies conducted by the company in the area have established that the iron ore in that region consists of 30 per cent to 38 per cent Fe (iron) contents and is unfit for making steel.

“We have carried out substantial exploratory programme in the area and the studies have revealed that the Fe content (iron) in the ore is between 32 per cent and 38 per cent. The ore found here is mainly haematitie quartzite. It is not feasible for us to use such low-grade ore to produce steel and we have requested the state government to allot captive mines in some other location where the iron content is higher,” ArcelorMittal India official spokesperson Mandakini Sud told Business Standard.

However, she said the company is waiting for the Supreme Court verdict following the report submitted by the Central Empowered Committee. “Our plan to go ahead and set up the steel plant depends on owning a captive mining lease and also on what the court says on carrying out ecologically sustainable mining. We are very keenly awaiting the SC judgment. Our future is dependent on the verdict. We have to wait and see what the court says on restricting the production of iron ore. If they allow auction of iron ore, the company is ready to buy ore through auction,” she said.

ArcelorMittal had signed a memorandum of understanding with Karnataka government during the global investors’ meet in 2010 for setting up the 6 mtpa steel plant with a 750 Mw captive power plant. Subsequently, the government had recommended to the Centre for prior approval to grant mining lease to the company. It had identified 211 hectares of lease area for the company.

The company had deposited Rs 260 crore with the Karnataka Industrial Area Development Board (KIADB) for acquiring land for the project in Kuditini village in Bellary district. The KIADB has already acquired 1,828 acres land and handed over to the company. It is in the process of acquiring another 872 acres. ArcelorMittal has asked the government to hand over about 131 acres of government land to them, she said.

Sud said 2,786 acres is enough to build the steel plant, while it is yet to submit a detailed project report to the government for building the power plant. It will be done separately, she added.