Tata Steel loses Chhattisgarh iron ore mine allotment

The prospecting work was to be completed in five years, which didn't happen

An earlier  iron ore mine allotment to Tata Steel by the Chhattisgarh government in Dantewada district has been cancelled, for not completing the prospecting work within the stipulated period.

The state government had allotted 2,500 hectares of iron ore-bearing land in 2008, to feed the company's proposed steel making unit in Bastar district, with an annual capacity of five million tonnes (mt).

Tata had signed an agreement with the government for the project. A prospecting licence was issued for the mine, having an estimated reserve of 108 mt of high-grade ore. The prospecting work was to be completed in five years.  “They failed to complete the prospecting work within the set time, following which the agreement for allocation of the mine stands cancelled,” state industries secretary Subodh Kumar Singh told this newspaper. Under the new policy, the mine cannot be re-allocated; it must be put for auction.

If Tata wants it back, said Singh, they'd have to participate in the auction. This development hits the plan for the Bastar plant.

The five mt unit would have meant investment of at least Rs 20,000 crore. The mine was about 100 km away. Land for the plant had been acquired by the government and transferred to the indstries department, which was to then lease it to Tata Steel.

Abhay Narayan Singh, local head of Tata Steel, did not take a telephone or respond to a message for the company’s version on the issue.