State run miner Odisha Mining Corporation has signed pacts with steel makers Adhunik Metaliks and Rexon Strips to supply iron ore for next five years from its Kurmitar Pahar mines in Khandadhar area in Koira mining circle of Sundergarh district.

Mr Saswat Mishra chairman cum managing director of OMC said that “We have entered into two long term sales agreements with two companies Adhunik Metaliks and Rexon Strips. These companies will get one million tonne iron ore every year for a period of five year from Kurmitar mine (Khandadhar).”

In return, the steel firms have agreed to develop a conveyor belt system in the area to augment iron ore evacuation from the mine, which is spread over 1,212.hactares and estimated to have over 60 million tonne iron ore deposits.

Mr Mishra said that “The companies will invest between INR 100 to INR 150 crore on their own in setting up the conveyor belt in lieu of our commitment to supply them iron ore continuously for five years at prevailing market rates.”

He added that the deal would not only ensure raw material supply to these steel units, but also boost production from the Kurmitar Pahar mines.

Currently Kurmitar produces only 1.5 million tonne iron ore every year due to constraints in evacuation. The proposed conveyor belt transportation system would help in ramping up the output at the mining site by four-fold.

Mr Mishra said that “At our Khandadhar mine, currently we are evacuating iron ore through a narrow and hilly terrain and thereby are able to produce only 1.5 million tonne a year. If a conveyor belt is set up in the area, then the production would go up to over four and half million tonne.”

Raw material supply is key to Odisha's ambition of becoming the largest steel producer in the country. The state has over five billion tonne of iron ore deposits and has signed memorandum of understanding with 50 companies for setting up of steel projects with a combined projected capacity of 83 million tonne at total estimated investment of over INR 200,000 crore.

Source - Business Standard

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