Rediff India Abroad
 Rediff India Abroad Home  |  All the sections


The Web

India Abroad

Sign up today!

Article Tools
Email this article
Top emailed links
Print this article
Contact the editors
Discuss this article

Home > Business > Business Headline > Report

Mittal's Jharkhand plan in limbo

Ishita Ayan Dutt in Kolkata | June 29, 2006 13:55 IST

Mittal Steel's proposed steel plant at Jharkhand is running the risk of being delayed, which could lead to cost escalation.

The main bottleneck appears to be mine allocation. According to the plan chalked out by Mittal Steel Jharkhand, the company is now at the point of making investments in machine and equipment.

Sanak Misra, chief executive officer, said the company was in talks with 12 companies for technology and equipment but could not place orders, since there was no clarity on the mines issue.

The implementation programme of the project was scheduled for October 2007, as per the roadmap drafted by Canadian company, Hatch.

The draft report was submitted this month. "Up to June, Mittal Steel is on schedule but by August we need a definitive picture on mines," he said.

The main contention boils down to Iisco-owned Chiria mines, the largest iron ore belt in Asia, currently under litigation. The Jharkhand government had filed an appeal, in the High Court, earlier in the year, against the mining tribunal ruling, which went in favour of SAIL.  Misra said Chiria was an important angle in the Mittal Steel project.

Chiria was the only known deposit in Jharkhand, he added. The other mines had not been explored and neither the volume nor quality was known.

The Jharkhand government has appointed Geological Survey of India and Mineral Exploration Corporation for prospecting of mines.

S Satapathy, mining secretary Jharkhand government, said Mittal Steel had sought a letter of comfort and the government was working on alternatives to Chiria mines.

The government was hopeful of finalising the letter of comfort within the next fortnight. Misra said the move to start exploring other mines was a step in the right direction.

The prospecting entailed assessing the quality of iron ore and volume of iron ore, which takes much longer.

Misra said if there was advance knowledge of the mines, then assessing the volume of ore would take at least a year.

He however clarified that it would also depend on the ability to conduct the assessment. Mittal Steel would like the Jharkhand government to proceed expeditiously with legal issues and mobilise resources faster, Misra said.

Mittal Steel's requirement of iron ore was around 600 million tonne over a 30-year period for producing 12 million tonne. The project would be in two phases of six million tonne each. The memorandum of understanding with the Jharkhand government for the steel plant was signed last October.

Misra said last year the Jharkhand government had shown a part of Chiria to Mittal Steel, which could be used.

Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group

Powered by

Share your comments


Copyright © 2006 India Limited. All Rights Reserved.