State nod for Horomoto mines to JSL

The Orissa government has recommended the prospecting license (PL) for Horomoto iron ore mines in favour of Jindal Stainless Ltd (JSL), which is setting up a 1.6 million tonne per annum (MTPA) integrated stainless steel project at Kalinganagar in Jajpur district at an investment of more than Rs 10,000 crore.

The recommendation has been sent to the Union ministry of mines along with the comments of the public sector Steel Authority of India Ltd (SAIL), which held the lease of the property before it was notified for grant of PL in 1991.

Consistent with the state government's policy of giving priority in allotment of mines to the companies which have singed MoUs with the state government for setting up mineral based industries in the state, JSL's case has been recommended for grant of PL.

Though the company had applied for PL for 1052 hectares, the recommendation is for 892 hectares. The total area of the Horomoto iron ore mines is 1700 to 1800 hectares and out of it, 1000 hectares are known to have good reserves.

Meanwhile, JSL has spent about Rs 4600 crore on its stainless steel plant at Kalinga Nagar and committed another Rs 3500 crore of investment in the project. The work on the stainless steel melting shop (SSMS), cold rolling mill (CRM), hot rolling mill (HRM) are in progress and the project is scheduled to go on stream in mid 2010.

Sources said, the applications were evaluated with relative merits of each individual case and the government stuck to the general policy of value addition, raw material requirement and capacity of the plant in deciding the most meritorious applicant.

There were about 14 applicants including the state-owned OMC, Arati Steel, Action Ispat and Power (P) Ltd., Tata Sponge Iron Ltd., VISA Steel, Jindal Stainless (JSL), Uttam Galva Steels, SPS Steel and Power Ltd. for Horomoto mines. Out of these, 6 applied for prospecting license and 8 applied for mining lease (ML).

The area was a relinquished area and was earlier held by National Mineral Development Corporation (NMDC) and Steel Authority of India Ltd (SAIL). It was notified for grant of PL way back in 1991.Though the prospecting of the area has not been done, the area is expected to have a reserve of about 30-35 million tonne of iron ore.

However, keeping in view the bitter experience while making recommendation in favour of Posco for issue of PL for Khandadhar iron ore mines in 2006, when the Orissa government faced embarrassment in the court of law, all the applicants were heard by the steel and mines department before making the recommendation, sources added.