With Chhattisgarh being home to Bhilai Steel Plant (BSP), Steel Authority of India ltd (SAIl) plans to set up a unit in the neighbouring Madhya Pradesh. State-owned miner NMDC is looking at the possibility of setting up a pellet unit in Chhatarpur district of the State - where the steel plant is proposed to come up - as this will help in supplementing the raw material requirements of the proposed plant.
Steel Ministry sources confirmed to The Pioneer that SAIl has applied for five mining leases in the area, which are currently at an “advanced stage” of being granted. Once the leases are received by the Maharatna company, the exploration process will take place. Depending on the quantity of iron ore available in the region, the capacity of the plant and the quantum of investment will be decided, sources informed.
Incidentally Steel Minister Narendra Singh Tomar hails from Madhya Pradesh. Sources further pointed out that with Chhatarpur having low-grade iron ore in abundance, a steel plant could be set up in the region. In fact NMDC has started exploration work for setting up a pellet plant there which may prove helpful for the plant in future, they added.
Beneficiation and pelletisation units are considered as value-added units for setting up a steel plant. While NMDC has started preliminary work for setting up a pellet unit in Chhatarpur, once SAIl is granted the mining leases for exploring the iron ore reserves in the region, the detailed project report (DPR) for the proposed plant could be prepared. Though it will take into account the quantity of the iron ore available in the region
The proposal for setting up a Greenfield steel plant in Chhatarpur was first mooted during a meeting between Tomar, Madhya Pradesh Chief Minister Shivraj Singh Chouhan and SAIl Chairman C S Verma, held in September last year. According to steel industry experts, in order to ensure economic viability of a steel plant that uses iron ore as raw material, the minimum size of such a unit should ideally be 3 million tonnes per annum with an investment of around Rs 20,000 crore, including the costs of setting up beneficiation and pelletisation units.
SAIl’s production capacity is expected to be 23 million tonnes per annum by September 2015. Post-2016, the Maharatna company will embark on another expansion programme for raising its capacity further to 50 million tonnes per annum by 2025 with around Rs 1.5 lakh crore outlay.
Meanwhile Tomar, who is also Minister for Mines, said on Thursday that the draft regulations on the auction of mines including iron ore have been prepared and will be sent to states to seek their views within a week. “The draft rules and the regulations have been finalised and will be sent to the states for suggestions within a week. The states will be given a time-frame within which they can reply,” Tomar told reporters in a press conference.
Mines and Minerals (Development and Regulation) Amendment Act, 2015, empowers the Centre to prescribe terms and conditions and procedures for bidding which include production sharing or royalty payment or a combination of both. Tomar further said, “since mines is a state subject, auction of mines will be done by states in which the role of the Centre would be limited to framing the rules to be followed in the process.”
The Government has roped in investment banker SBI Capital Markets to suggest rules for auctions as well as the bidding parameters. The ministry has already identified 199 mines which contain minerals like limestone, iron ore, bauxite and manganese ore among others, for the auction process.