The state-owned Steel Authority of India Limited's flagship unit -- Bhilai Steel Plant, about 30 km west of Raipur, is now reeling under deep threat, as its existing iron ore mines at Dalli-Rajhara is depleting at fast pace, and hence the compelling requirement for smooth run of BSP is to kick off project at new mining reserves at Rowghat, which needs deforestation.
But the robust presence of Maoists is becoming the main stumbling blocks to the mine development work at Rowghat as well as the construction of railway line that will link Rowghat to BSP, as the armed rebels' pamphlets warning 'One tree, One life' have terrorised those engaged in tree-felling.
The report says that SAIL had started clearing forests, but since October, 2010, it could cut down only 12 trees till now.
In March last year, Maoists set fire equipment being used by the contractual agency engaged by RVNL to set up the rail link.
BSP officials have been demanding for the adequate deployment of security forces in the Maoist belt to re-start the tree-cutting activity in a bid to resume work on laying rail line and establish road-link for moving men and equipment to Rowghat area.
The much required railway track would be the lifeline for the project.
As per environmental and forestry clearances, BSP would mine the ore and transport it to Dalli-Rajhara by rail for the process of beneficiation.
At present, as per geological estimates, there is meagre deposit of iron ore left in BSP captive iron ore mines at Dalli-Rajhara Iron Ore Complex.
Moreover, BSP are presently working in the ledges at Dalli-Rajhara, because of which quality of ore is also affected. BSP needs around 10 MT (million tonne) of iron ore annually to sustain production levels. Its iron ore production from captive mines in last fiscal year was 7.8 MT.
There is obviously a shortfall to make up for which BSP is sourcing iron ore fines from SAIL's Raw Material Division.
BSP still sources around 1 lakh tonnes of fines from RMD every month.
Moreover, with the plant undergoing expansion in capacities, the quantity of iron ore required is also going to go up to 14 MT.
Even if it were possible for any organisation to supply such large volumes, it is not logistically possible for BSP to procure and transport such huge quantities of lump ore as are required to sustain production levels.
Besides, other states having iron ore reserves of desired quality would not be willing to supply to BSP because they would rather prefer to add value within their state by asking steel making companies to set up steel plant in their state.
Besides this, the only option left would be to source ore from SAIL's RMD or from NMDC.
But the cost of transportation, even if the Indian Railways provides extra rakes for the same, would be forbidding.
The anxious point for BSP officials is that the cost of transporting ore would substantially add to their cost of production, and consequently eat into their profits.