Tata Steel loses iron ore mine in Chhattisgarh

Development may cast shadow over steel major's proposed Rs 20,000 cr Bastar plant

Iron ore mine allotted to Tata Steel by Chhattisgarh government in Dantewada district stands cancelled as the company failed to complete prospecting work within the stipulated period.

The state had allotted 2,500 hectares of iron ore bearing land in Bailadila deposit No. 4 to Tata Steel in 2008 to feed raw material for its proposed steel plant to be set up in Bastar district with an annual capacity of 5 million tonnes. 

The company had signed an agreement with the state government for the project. A prospecting licence was issued to the company for the mine with an estimated reserve of 108 million tonnes of high grade iron ore. 

The prospecting work was to be completed within stipulated period of five years. An extension of another term was given to the company following multiple challenges as the mine site was located in the pocket where Naxalites had considerable sway. After prospecting, Tata Steel would have qualified and applied for getting the mining lease (ML). 

“The company failed to complete the prospecting work within the set time following which the agreement reached with the state government for the allocation of iron ore mine stand cancelled,” Chhattisgarh’s Industry Secretary Subodh Kumar Singh told Business Standard.

Under the new policy, the mine cannot be allocated to any company and would be put for auction.

Singh said if Tata Steel wanted to get the mine back, it had to participate in the auction. As of now, the company had lost the iron ore mine.

The development was likely to cast shadow over the Bastar plan of country’s largest steel producer. The company had planned to set up a 5 mtpa Greenfield integrated steel plant in Bastar with an investment of over Rs 20,000 crore.

The Dantewada mine would have been used to feed the plant located at a distance of about 100 km. The land has been acquired by the state and been transferred in favour of the Department of Industries, which will subsequently lease it out to Tata Steel Limited. The process is still underway.

Local head of Tata Steel, Abhay Narayan Singh, did not take calls and did not responded either to text message.