Tata Steel has cancelled its plan to set up a 5.5 million tonne integrated steel plant in Chhattisgarh’s Bastar district.
The company had signed a memorandum of understanding with the Chhattisgarh government in June 2005 for setting up the plant at an investment of Rs 19,500 crore. After extensions, the MoU period finally ended in June and Tata Steel did not seek more time.
Anand Sinha, Tata Steel’s Chhattisgarh project head, said the company had decided to drop the Bastar project over delay in land allocation.
Tata Steel had selected a site near Lohandiguda in Bastar district. About 2,000 hectares of land was required. Since the pocket is notified as a “tribal area”, the company could not purchase land from villagers. The state government was to procure land and allot it to Tata Steel.
“Tata Steel has sent a letter to the state investment promotion board informing it about the decision to cancel the project,” said Sunil Mishra, managing director of the Chhattisgarh State Industrial Development Corporation. Land acquisition in Lohandiguda was still on, he added.
Tata Steel has also lost an iron ore mine it was allotted in Dantewada district, 150 km from the proposed plant. The company was allotted 2,500 hectares of iron ore-bearing land in Bailadila by the state government in 2008 to feed the Bastar plant.
A prospecting licence was issued to the company for the mine that had estimated reserves of 108 million tonnes of high-grade iron ore.
Tata Steel failed to complete prospecting within the set time, following which the agreement with the state government was cancelled.
According to Mishra, the state government cannot re-allocate the mine to Tata Steel under the amended Mines and Minerals (Development and Regulation) Act, 2015. The company will have to participate in auctions.
Tata Steel has wound up its offices in Raipur and Bastar.