SAIL scouting for new iron ore mines in MP, Chhattisgarh, Odisha

State-owned SAIL is scouting for new iron ore mines in several states, including Madhya Pradesh, Chhattisgarh, Odisha and Karnataka, as it is gearing up to increase its steelmaking capacity by up to 50 per cent to 21 million tonnes by this fiscal.

"For ensuring regular supplies of iron ore, capacities of existing iron ore mines are being expanded and new iron ore mines are being developed. In addition, new iron ore deposits in the states of Rajasthan, Chhattisgarh, MP, Maharashtra, Odisha and Karnataka are being explored," SAIL said in its annual report for 2012-13.

Currently, Steel Authority of India (SAIL) meets all its requirements through captive iron ore mines and had produced 21.48 million tonnes (MT) of ore in the last fiscal to produce 13.4 crude steel.

By March, 2014, its hot metal production capacity - the benchmark for steel production capacity -- is expected to rise to over 21 MT, as the company is expecting to commission majority of its Rs 72,000 crore expansion programme.

However, this will also lead to over 50 per cent jump in iron ore requirement for the company to about 34 MTPA as 1.6 MT ore is generally used to produce 1 MT steel.

To meet the requirements, the company is expanding the capacities of its several mines, it said. This includes expanding the capacities of Kiriburu mine (to 5.5 MTPA from 4.25 MTPA), Meghahatuburu (to 6.5 MTPA from 4.3 MTPA) and Bolani (to 10 MTPA from 4.10 MTPA).

"With the commissioning of these projects, the enhanced requirements of iron ore will be met by the captive mines," SAIL said.

The company has also received "final forest clearance" for Bolani and Barsua iron ore mine and stage-I forest clearance for Gua iron ore mine. Moreover, "environment clearance for the capacity expansion of Gua and Bolani mines and renewal of Dhobil mine were also obtained" from the Environment Ministry, it said.

To increase its iron ore reserves further, SAIL is in the process of finalising the joint venture agreement with the Chhattisgarh Mineral Development Corporation (CMDC) for development of Eklama iron ore reserve in Kabirdham district of Chhattisgarh.

The mine is estimated to have reserves of around 100 MT and SAIL intends to use the ore at its Bhilai steel plant, which is located at a distance of around 135 km from the mine.

The company has also submitted five applications to the Madhya Pradesh government for grant of prospecting licence for iron ore bearing areas in Chhattarpur district and is interested in setting up iron ore beneficiation and pelletisation plant in the state, SAIL said.

Talking about its coking coal requirements, the company said that it is in the process of developing Tasra coal block in Jharkhand and is eyeing at 4 MTPA production through a mine developer-cum-operator (MDO).

SAIL had appointed Lanco Infratech as the MDO for the block in July, 2013 for developing the block and setting up a coal washery.

"Large-scale production at this colliery is likely to start by mid-2015 after completion of pre-development activities such as land acquisition, R&R and associated infrastructure," SAIL said.

The company currently meets only 24 per cent of its requirements from domestic coking coal mines and balance 76 per cent is met through imports. In 2012-13, it had imported coking coal worth over Rs 7,800 crore.

Besides, it has also sought allocation of 2-3 thermal coal mines to meet the growing requirements from the Coal Ministry through government dispensation route, the company said.