Essar Steel readying to get nod for Odisha iron ore block

The mine Essar Steel has bagged has reserves of 100 mn tonne; firm plans to mine six million tonne a year

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As Essar Steel looks to start mining from its iron ore block in Odisha next fiscal, it is taking swift steps to obtain clearances.

The Indian Bureau of Mines (IBM) has approved the mining plan for the block. Essar Steel has also got the terms of reference (ToR) from the Union ministry of environment, forest and climate change.

“On September 20, we will have a discussion with the standing advisory committee of the environment ministry on the ToR. We are also in the process of getting approval for a forest diversion plan which normally takes six to eight months. The Odisha mine will cater to 30 per cent of the raw material requirements for our steel plant at Hazira,” said Rajendra Kumar Mittal, chief executive officer (Odisha), Essar Steel.

The steelmaker recently bagged the Ghoraburhani-Sagasahi block in Odisha through auctions, quoting a premium of 44.35 per cent above the reserve price and outbidding strong contenders like Tata Steel and Jindal Steel & Power Ltd.

The iron ore mine that Essar Steel has bagged has reserves of 100 million tonne (MT), as per the current estimates. The company plans to mine around six MT per annum.

The Odisha government has issued the letter of intent to Essar Steel after it emerged as the preferred bidder in the first iron ore block offered for e-auctions in the state. The block is at G2 exploration (general exploration) stage and located at Koira sector in Sundargarh.

The mineral concession area is spread over 139.16 hectares (ha) including 20.88 ha forest land, 110.69 ha government land and the balance of 7.58 ha private land. The Geological Survey of India has surveyed the mineral block.

Essar Steel runs a 12 million tonne per annum (MTPA) iron ore beneficiation plant at Dabuna in Keonjhar district and a six MTPA pelletisation complex at Paradeep. The iron ore mine in Odisha is expected to meet 50 per cent of the firm’s pellet making facility at Paradeep. The pellet produced at Essar’s Paradeep facility is mainly meant for use at its 10 MT integrated steel plant at Hazira.

Essar Steel’s flat steel production in the April-June period of this fiscal was 1.22 MT, marking a growth of 48 per cent over the 0.824 MT produced in the same period of the last fiscal. Even pellet production grew by 58 per cent to 2.02 MT, as against 1.28 MT in the comparable period of the last year.

By the end of 2016-17, Essar Steel expects to record a marked increase in its capacity utilisation, and produce 80 per cent of its rated capacity in the country.