December 02, 2008

Orissa iron ore deposits have to feed 60+ MoUs

It is reported that Orissa state government, which has signed over 50 MoUs for establishment of steel plants in the state, is facing acute shortage of iron ore although Mr Padmanabha Behera minister for steel and mines of the state does not foresee any shortage of iron ore for the proposed steel plants.

A government source maintained that this is unlikely to meet the demand of ore from the 50 odd plants, which will come up in the near future. With a combined capacity of more than 60 million tonne per annum, the steel plants will need at least 100 million tonne iron ore per annum. But with the reserves getting depleted, experts fear shortage of iron ore will hamper operation of these plants.

Orissa's iron ore reserves are estimated at 5428 million tonnes out of this, 3133 tonnes is in mines leased out to private companies and 766 million tonnes has been given to Government run agencies. That leaves the state government with reserves of only 1529 million tonnes.

Official sources said that out of the companies, which have signed MoUs, 17 have started construction of steel plants and around 10 of them are nearing completion. As per officials, the revised mines allotment policy would ensure that non serious players are not leased out mines. As per the norm, the lease will be allotted only after the promoter has committed 50% of the proposed investment.