MOIL to spend Rs 40 cr on prospecting new areas in Maharashtra

State-owned manganese producer MOIL is planning to spend about Rs 40 crore on prospecting 11 blocks, involving an area of 597.44 hectares in Nagpur and Bhandara districts of Maharashtra.

"We have already taken consent of local people for prospecting and all conditions have been complied with. Now we are set to begin prospecting for the blocks. We also have forest clearance for the geophysical prospecting," a senior official said.

The blocks are nearby the company's existing mines in Maharashtra and the state government had given prospecting license (PL) to the company in July last year.

Of this, six blocks are located in Ramtek, Saoner and Mouda tehsils of Nagpur district and five are located in Tumsar tehsil of Bhandara district.

Today, the company, in a filing to the BSE, announced that it has executed and registered PL deeds for the blocks.

"We will be spending about Rs 30-40 crore on prospecting of the area. It is part of the plan to expand our production capacity to 2.2 million tonnes (MT) by 2020. We hope to secure mining lease in next two years," the official said.

The company had earlier said that it will utilise some of the areas for expansion of the existing mines and there is a possibility of opening up of at least four new mines.

MOIL, which is the largest producer of manganese in India with a market share of over 50%, already operates 10 mines in Maharashtra and Madhya Pradesh.

This includes seven underground mines (Kandri, Munsar, Beldongri, Gumgaon, Chikla, Balaghat and Ukwa) and three opencast mines (Dongri Buzurg, Sitapatore/Sukli, and Tirodi, that are estimated to have total reserves of 60 MT.

The company has already announced plans to invest about Rs 1,100 crore on expansion and augmenting its existing mining projects by 2016-17. Of this, a big chunk of the money is expected to be spent on expansion of the Balaghat and Dongri Buzurg mines, which are envisaged to have 5 lakh tonnes capacity each.

For the current fiscal, which is about to end, the company has set a production target of 1.15 MT. By 2016-17, it is eyeing at having 1.5 MT production capacity. The manganese ore is used primarily in making ferro-alloys for steel production.